Good afternoon and welcome to the Severn Trent Results Call. So obviously, it's a Q&A session with yourselves. I'm joined today. I'm Liv Garfield, Chief Executive, and I'm joined by Helen Miles, our CFO, and by Shane Anderson, who looks after strategy and regulation. So you'll hopefully see the presentation that we posted first thing, and that's given you hopefully lots of food for thought and maybe cleared up a few questions in advance. And now we thought we'd just open it up and see where the conversation goes. So I can see that, Sarah, you're first up. You must have had your hands right on the buzzer, so you win today's gold prize. Do you want to go with your question? Thanks so much. I'm going to dive into two, please. The first one is actually on green power and your green power strategy. So just wondering whether the proposed treatment of energy costs in the Reg business in the next AMP, if that changes how you view your green power business and the long-term strategy going forward. And then C-MeX, please, any updates you could please provide there, how you're tracking. Okay, good. So two good questions. So on green power, what I think Helen said recently is that, whereas for the last five years it's made sense to hedge the two together, that might be different going forward. So we're still digesting, actually. There's a lot of detail, but it's quite niche on the kind of true-up process, and we'll probably need to send a couple of queries to Ofwat to ask a few questions around it. So we're still not 100% certain everything that's come out of that. So did you want to talk about green power anyway, Helen? Yeah, green power, in terms of the strategy, that won't change as a result of what happens in terms of the Reg business. We've grown green power over a long period of time. We're still increasing generation, and we've recently invested in more solar. So I think we'll continue to be opportunistic about green power, but it may affect our hedging strategy, but it won't impact how we view the green power, which is an important part of the group and our net zero ambitions. Very good. But Shane is going to follow up with more queries with Ofwat specifically to understand the energy in more detail, and we can, I guess, talk about that at the half-year results and probably have some feedback back by then. So as a C-MeX, so it is one of the ODIs that is on the carbon metrics. I think we think it's probably an asymmetrical to the downside metric currently, and we'll present that feedback to Ofwat. So we understand their ambition, and we have total support for their ambition. Their ambition is that they want customer service to get better in the sector. That's fair. So do we, right? We're spending scale money on things like Kraken, like the insourcing of wastewater, like making sure that we get to visible leaks as quickly as possible. So their ambition is spot on, and we're aligned with it, which is we all want sector service to get better. I think that's probably slightly different as to whether we think that they have currently got the right exact format for the metric that is symmetrical, and we think it's asymmetrical currently. So that's the conversation we'll have with Ofwat: get the ambition, but if that is the ambition, if that metric doesn't change, then it probably is an asymmetric measure, which means that the risk of a reward-balanced package needs to reflect it's an asymmetric measure currently. At the moment, it's in there both as a symmetric measure, and also it's in there at the level it is. So does that kind of cover the questions, Sarah? Perfect. Thank you very much. Very good. All right, then Mark, you are button two on the buzzer. Hey, thank you. I've got a number of questions. Firstly, when you put the draft through your model, Helen, and it throws out your business planning model, what does it show on the credit ratios, and are you where you need to be financially to get to BBB+ for the OpCo? Further to that, I know that one of the issues across the industry was marking down the RAB runoff rate, right? So it pushed a little bit of cash flows backwards. I was just wondering what the impact of that was versus your draft. And then finally, one of the slides spoke about your expectation of an opening RAB of GBP 16.2 billion, and the draft had GBP 15.6 billion in it on your metrics. That's RAB and shadow RAB. And I was interested to understand what the reconciling differences might be. Thank you. Very good. Okay, let's do the easy ones. We'll go back in order, I think. So Shane, do you want to clear up the 16.2, 15.6, and you also want to talk about the levers? Yeah, so I think it's a good spot. I think I forget which model it is on one of Ofwat's suite of models, but the RCV midnight adjustment is missing some of the real options as well. So Ofwat called that out. They're not picking up all of our real options, so you'll find the differences there. So recall we had over GBP 200 million of delivering extra wind-up programs. This AMP, that's not flowing through to the midnight adjustment. So there's upside there at the moment. On the use of the RCV runoff, I think that just needs to be viewed in the round with the financeability levers. So as we did in our plan, we addressed the notional financeability constraint by using the levers, but we said these should be unwound when Ofwat sets an appropriate cost of equity. Clearly, Ofwat moved in the right direction with increasing the cost of equity and that offsets from the levers. I think there's probably more to go at in this space, so we'll be making representations to that effect. I hope you'll answer the first two. Then Helen, I thought we're not going to do is suddenly unveil all of our models. No, of course not. But I think to answer your question, Mark, I think we're committed to an investment credit rating, BBB+ and Baa1. So we're not moving away from that. I think there's still a way to go in terms of the modeling. We want to look at context. We know the cost of debt will be increasing as Ofwat updates the latest market conditions, particularly 2023, 2024, and an estimate of 2025. So there's still a lot of moving parts, but our commitment to that credit rating hasn't changed, and we'll be reviewing both the draft and the final in that context. Good. Okay, Bob, we're going to let to you. Hi everyone, afternoon. Thank you for taking my questions. I'll start with two. My first one is on your addition to the list of companies being looked into by Ofwat in terms of the enforcement cases. Can you give a bit more color as to why that's being done at this stage of the investigation, what new data it is that they have that they didn't have before, and any dialogue you've had with them since then on that investigation and any color you could provide, please? That's my first question. And then my second question, Ofwat flagged, and you call out in your presentation today, the fact that the ODI regime and the incentives are being strengthened. Does that give you confidence that you can continue to earn ODI rewards like you have in the last two AMPs? Any color you could give on that would be very helpful, please. Thank you. Very good. So I guess there's a long way to go still between draft and final in terms of individual specifics. We still don't understand all of the exact details of the ODIs, like we said earlier. We've got some queries to send into Ofwat. So we're definitely not in a position to give you guidance on ODIs. We only ever give you guidance one year out. So I'm afraid the only guidance that we're currently live with is year five guidance, so we're confident of being on track for that. Wider, if you look at what Ofwat itself has said on ODIs, that's what we tried to put out, is that it boils down to a smaller metric. That's a smaller number of metrics we've got to do well on. They are strengthening the upside downside. So if that is true, I'm assuming Ofwat will get the balance right. So there is symmetrical upside downside. We would say that there is some anti-symmetrical or asymmetrical. Thank you. Asymmetrical upside downside on some of the metrics now, which will need querying between draft and final. But Ofwat have said really clearly they want a balanced portfolio with fair up/down and a smaller number of metrics. We're a good performing company. We're a company that performs well on those metrics typically. So provided the balanced package is balanced at the FD, then you would expect Severn Trent to be an ongoing ODI winner. But there is some work to be done on that balanced package. C-MeX being a good example of one at the moment is showing us balance, then yes, at the moment all companies will be in negative territory as it stands. It's probably just important to emphasize that in the methodology, Ofwat said they would seek to address asymmetry at the source. So I think this is a key point for where there is asymmetry in an ODI, going back and making sure you address that, like the C-MeX pegging point. Very good. And then on the enforcement case, so the conversation we had with Ofwat last week when it came up was that they felt that in order to settle the cases with everybody else in the sector and considering the fact that the spills performance had increased between 2022 and 2023, they felt it'd be wrong now to not ask for the data from the remaining four companies. So that was the conversation. I guess that's, I guess, frustrating on the one hand, because I guess to some extent we are massively committed to leaning into the spills conversation, and we feel like we're doing more than we feel like Ofwat actually says in their own press release that they acknowledge that we are doing more than everybody else across the whole sector and that they acknowledge that. So the things that I would take from the press release is they make it really clear this is about future compliance. That's where their interest is, is future compliance. Well, then I have no qualms with this because I'm going beyond compliance. So we've said openly that we intend to spend the investment it needs to get ourselves to much beyond compliance. So while it is frustrating that we now have to hand over a whole lot of data, and it is obviously a bit kind of like negative on a share price impact, and it's been a bad look for us across the piece, in terms of the end implications, I've always been very, very clear that I'm committed beyond all else to getting spills down and that my alignment with Ofwat is completely in lockstep. We both want less spills. We both want companies to go beyond compliance. So we'll have a constructive conversation over the next few months with Ofwat. We think we're talking about months, not years, in terms of providing the information they've asked for and probably then committing to some performance metrics going forward. And we think that's what it needs. And we're not nervous of those metrics at all because we're going to be going beyond what we understand they've asked other companies to provide. So I guess end state will be fine, but yeah, it was not ideal. Good. Okay, so let me see who that is flashing up. So I think, let me get my glasses on. I'll be able to see. This is Bartek. Good. Okay, Bartek, you're very small, unfortunately, on our screen. We have to get close to you and see you, but it is you with narrow eyes. Let's pause. You're now a bit clearer. Bartek. Hey, hello. Can you hear me well? Yeah, perfect. You can. Very good. Two things maybe. One, of course, the typical question on the allowed WACC. And I just wonder what are the elements you think you can still discuss with Ofwat to be somehow changed and what you don't like on the presentation. You said what you like, but maybe there are items you don't like. I can think about one of the elements, i.e., the CPIH-RPI wedge, which somehow has decreased versus the early view and the previous steps. And maybe there are other items you think we can discuss still or you think you have the arguments to discuss with the regulator. And then the second thing on the sort of, let's call it the conditionality of your balance, sorry, of your business plan reward. Are you actually surprised with the fact that Ofwat has put conditions on your 30 bps reward? And then secondly, if you actually don't meet the KPIs to earn the reward, what would happen in a situation when, let's say, the final WACC is lower than the draft determination WACC? Would you need to return the difference as well or only the reward? Thank you. Very helpful. Good. So let's start with those. So I mean, on the WACC, we always say don't obsess on it. So I've done 10 years in this job, and I have said that consistently every year for 10 years. It's not like a new refrain. So what's the situation around it? It's gone up, hasn't it? Quite a lot. It's gone from 3.29, I guess, went up into the 3.7s. And it will go further. So Ofwat has been really clear that's a minimum for us. Remember, the WACC is now a minimum for us. And remember, it did go down last price review between draft and final. We now have a commitment to that same minimum. We know that that minimum will go up for the cost of debt because they'll take the most recent cost of debt numbers. They've said that in their methodology and flow that through. So we know the cost of debt's gone up this year, so that will be another increase to be seen. We don't get involved in squabbling on the sub-levels. So I guess if Shane was given a pen and paper room and 8 hours, he'd probably have like 1,000 points that he'd want to write down, but we just don't, there's no point playing out those arguments, and we don't argue about the WACC in public. We will make all of our evidence clear, justified in our reply to Ofwat, but it's an in-the-round settlement. So the WACC in itself isn't something that we look at and say is kind of like a major issue. If the ODI brackets are fair, if the enhancement spend is fair, if the base cost true-ups are genuinely correct on things like energy, and if we feel that across the piece, then the levers have been well managed, the whack is just one component part. So it's in the round. So view it in that sense. On the second part then, I mean, I suppose look at it again, take history. Last time round, there were four categories in the price review, and Ofwat never gave any to the top category. So we got the second top category, didn't we? Fast track. But there was an exceptional category, and they chose to never give it because they said if we give it, you'd almost have to have more conditions that went with it. So they chose not to give it. This time round, they did give it, but in exchange came a couple of conditions. I think that's a better way of doing it than not giving it to a company. We could have said we don't like those conditions behind the scenes to the point they were offered to us. Instead, we looked at them and said we understand from their perspective why they feel like they need those perspectives. And actually, they're heading in the same way as Severn Trent. So let's be clear what we have to do. We have to give more company, more money to customers, and that's GBP 25 million to make sure that customers don't struggle to pay their bill. I don't think anybody here was upset to hand that money over. The RCV growth is 28%. It is strong. The RCV growth is going to go up again between draft and final. That's clear. And so actually helping customers feels right. So we're okay with that actually across the piece. That's fine, right? And we did get more money on our retail determination, which helps us with that because we run an efficient business. So we're given more money than we asked for, so it helps. And then we've got to get spills down to an average of 14. Gosh, if I'm only down at an average of 14 at some stage over the AMPs and all the work that I'm doing this year would not have had anywhere near the impact we expect to have. So we're all in on the fact we need to get below that. Every spill is one spill too many. We need to get below that number. So we're confident of getting to that number. We're doing scale work at all of our sites. We need to get one star once in five years. Four star. Four star. One star. Yeah. We're really shooting for the stars now, right? So we've got to get to four-star once in five years. That's the right way around. Yeah. That's one star for four years. Yeah. That's a much bigger problem somehow, right? So I suspect the board would not be happy with me at all if I wasn't delivering the four star anyway. So we've already delivered five years on the bounce of four star. We're on track for this year again. That's year five. So we'll just have to keep going. So we want to be there anyway. So delivering four star once in five years seems a very reasonable situation for us to be asked to deliver in exchange for the GBP 93 million. In terms of what happens, you do have to give back the GBP 93 million if you don't hit those numbers. So that is true. So the best thing we can do is hit those numbers early in the amp, and then it's off the table. So GBP 25 million is easy. We just give it to customers. Let's hit 4 star early. Let's hit 14 average spills as early as possible, and then we won't be debating it in the tail end of the AMP because we'll have delivered it early. So that's what we're going for as a senior team. Deliver early. Okay. Thank you. May I just ask for one clarification, please? Go on. This GBP 25 million to customers, will it go through TOTEX under performance kind of, or is it going to be approved in your TOTEX number? It's separate to TOTEX. So it's between GBP 1,000 and GBP 7,000. Effectively, the way that we'll manage it is that we know that the thing that customers really need help with is payment matching, right? In terms of debt management, we know that's the stuff they need help with. It's that you've got customers that get themselves into a pickle, but they want to pay their bill. And effectively, it's the historic debt you've got to pay and match them. And that's the bit that we know when all of our analysis of how you can best help a customer to get back onto that is some of those schemes. Yeah, because we're already providing discounts up to 90% for the bills in the period. So we're just looking at the debt, which is where we can do a bit more to support customers. That's what we'll likely spend it, is the historic debt where someone's got themselves into a bit of a pickle and they need help to go forward. That's the best place. But I think it's probably just important to mention that every company that's made proposals to support customers, Ofwat will be requiring them to deliver that. So while we've got this conditionality, for every company that's made an offer to help customers, you've got to lock that into your, I think it's RP5 or something or RP4, one of the data tables. Ofwat will be monitoring performance against that as well. So you do need to, it's not just for us, it's required to support. Exactly. It'll make no difference. So HD that is standard has the same implication as Severn Trent, which is outstanding. So to some extent, that's the whole sector. It's named under that basis, but actually the whole sector has now got a new commitment to deliver that. Yes, so HD's standard reward would be at risk if they don't deliver that. Exactly. Good. Okay. John, over to you. Thank you. Yeah, I should have put up my hand earlier because a lot of my questions have been asked, but I still do have two. If I understand properly, you and all of the water company CEOs, I believe, met with Steve Reed, the Environment Secretary, after Ofwat's draft determination. So I'd be interested to hear if you did indeed meet him, what you discussed. And I think Steve Reed said the government could bring out other measures related to water. Do you have any idea what those could be? And then the second question I had is in relation to your enhancement TOTEX, which was the area that Ofwat cut most in percentage terms to most firms. Where do you think you've sort of got the strongest evidence to present to Ofwat to try and get back some of the enhancement TOTEX you put forward, and how much do you expect to get? So the private meeting between Steve Reed and the chief execs definitely is that. It's a private meeting between Steve Reed and the chief execs of the sector. So it was great to see a new Secretary of State join to immediately want to meet the chief executive of the sector and to say openly that he wants to create an investable sector. And he's really clear that standards have to improve. So he wants to see less spills, for example. He wants to see every last pound of customer's money spent wisely. But also, he wants to see the investment go forward. And so he wants to create an investable sector that can be successful for customers and the environment. So that is all that is probably best said on that. On the enhancement TOTEX, I definitely can't give you a prediction of the number because I guess we've still got queries going in to understand some of the cuts, and we've got to lay out our best evidence. But I suppose if you look at Ofwat's own tables, they basically said, didn't they, that if you look at, they had like a nice little image, which we've put on our slides, which shows what they said they've done before and they show what energy companies have done before. And broadly, their number says they expect to move, you could argue, by about 50% is what their data table said. Now, whether that's what happens to all companies, we'll wait and see. On everything which was model spend, we got in that 90%. Where Ofwat had a model that said you should be in that, we proved to be very efficient. It's only the individual cases where either no one else is doing it or where effectively they couldn't understand and their deep dive required more evidence. Yeah, the deep dive automatically applied cuts of 10%, 20%, 50%. So that's where we've got some of the gaps. So Water WINEP, for example, where we've got to reduce our abstraction licenses and therefore have to replumb the network. It's very novel. Only two companies are doing that. Ourselves and Affinity, both of us had similar levels of cuts because it hasn't been benchmarked before. So I think where, as I was saying, where there's a new kind of novel item, that's where Ofwat's provided some clear steers on what type of information they want, and we can provide that feedback. So we've worked through it. We've had some good meetings over the last couple of weeks with the senior team, and we're clear on everyone is busy crafting all of our evidence, all of those cases. The key thing for us is Ofwat's agreed with the need for all 13 of our enhancement cases. They just didn't agree with the scope of all of them, or they didn't say our costs were efficient in all of them. Or concerned about some potential overlaps, for example, on bioresources where they thought it might veer into IED and so we can provide the evidence that it's not. Yeah. So we'll work through that, but this is a well-trodden path in price reviews is providing extra evidence on enhancement spend cases. Thank you. Mark. Hi, Shane. Just a follow-up, if I may. With regards to the RAB runoff or the RAB depreciation rate, sorry, just to be clear, you're intending to go back with justifications for a higher percentage runoff. Is that correct? Yep. Correct. So just like last time, I mean, it's a massive lever for finance. You got the same last time, right? It was a game changer for dividends. It was the same logic as well that we've used. I think the other point is to emphasize that we've used the financial levers to address a notional financeability constraint that was consistent with the rules that Ofwat laid out in the PR24 methodology. We think there's a few issues that we can go back on. Yes, we are definitely making those representations. Just on revenue increases, I mean, in your business plan, when you made that public at the end of September, you provided a helpful table at the back laying out the P&L, right? Five-year forecast based upon, well, not forecast, based upon the outcome of your filings. There's not that this time, and it is, I understand there were a bunch of adjustments that sit on top of the draft. So the K factors and the exact revenue movements are still very much up in the air. But in terms of getting a revenue profile across the AMP, what would you point us towards to try and get that from the draft? What is the table or line in the spreadsheet? I would look at the build profile because we had the slight, what is it? I don't know how to draw this down, but we had the slight increase in, I think it was 2023, 2024, and then coming down in 2024, 2025. And it looks like Ofwat has retained that. So I would look at the build profile as the guidance to then reallocate the revenues that way. That's the one on what is it? Slide. I wouldn't know an Ofwat's document. 11. Without a build profile, I would use that versus our build profile to try and, if you want to get to a new answer. Yeah. I'll put the build profile for us was on our slide, slide 11. But I think the Ofwat's one has a bit more detail. So I'd say I get the table. That includes your one on slide 11 includes things like ODI expectations for. No, no, no, no, no, no, no. That's what I'm saying. So no. So it doesn't. That's what I was saying. I think what we're saying is what we gave you last year, I guess, was a very detailed submission where we understood every last element because we were submitting it. So when we submitted our plan, we were able to give that. What we've now got is we've got Ofwat's take on the build profile, which is a straight take. It doesn't do any carryover ODIs. It doesn't do any ODI performance upside going forward. It doesn't assume any financing outperformance, and it doesn't include any non-REG revenues. So none of that is in there. And right now, we're flat out with responding to the price review and making sure we strongly deliver this year and get our business in good shape. So I'm afraid we won't be reissuing that. When we get to the FD, we will reissue some stuff. So once we get to the FD, we will then reissue with all those various things as far as we've done before in it. But for the moment, I'm afraid you're going to have to, to some extent, take the info that Ofwat has given you and apply your own model adjustments based on historic performance to those models and your understanding of our non-REG. That is broadly where we are, I'm afraid. Okay. Thank you. Sorry. So I think AJ was going to ask a question, but he's gone off screen. So Pat, you're back on. Hello. Thank you for taking my follow-ups. I had two, please. Yeah. Firstly, on the you mentioned doing block tariffs and being enabled by Kraken. Can you talk a bit more on why you're doing that? Is that something that Ofwat has asked you to do, or how, I guess, if you under or over-recover when you're using block tariffs versus assumptions, how that feeds through to the regulatory model? And my other question for you, Helen, was on you mentioned with the cost protection that may come with timing gaps. Can you give a bit more detail on what those timing gaps would look like? And I guess is the intention that where there is a gap and where there's working capital, for example, that investors would be made whole and Severn Trent would be made whole on an NPB neutral basis using the Ofwat cost of capital? Thanks. A couple of things. I'll start with the second one. I think one of the debates still for us on the price review is business rates. We've been clear already with Ofwat that business rates, at the moment, they've got an end-of-AMP process. I think we just need to make sure that the start point is right. I think what Ofwat have done is they've moved to a 90/10 split of 75/25. That's a welcome change on risk levels. We do need to make sure we have the right start point. There's still some debates on that start point. There is a first of all, there is that conversation. Then secondly, there is a conversation, do you do a true-up at the end of five years? Do you do a true-up at the halfway point? Do you do a true-up every year? How does that work? I think Ofwat doesn't want to end up where customers take unreasonable risk and we take big numbers and that doesn't come through. We totally get that. Equally, I think our point would be it's unfeasible for investors to fund a working capital situation for a long period of time as well, right? So there's got to be a. We've still got to find the balance on that one. I think it is worth having touched on some of the other stuff there that they haven't announced that is more so that is fair in terms of looking at materials and looking at plants and some of those things. They have added some extra risks around some of those things. Yeah. Yeah. Protection. Yeah. Protection against risk on materials, which is helpful. It's a significant cost for us, particularly with enhancement spend. So having that protection where if those costs are going up, rates of inflation, we will get that back. That's very helpful because that's something we've experienced significantly this AMP, as you know. And of course, there's also the true-up on energy costs as well, which as well as business rates. And that, again, it's just something where we've got to work through as we go towards the final determination. We've got to work through the actual cost assumptions. Are they right? And when do you get trued up? Because there is a cost to carrying that forward for five years. And we need to look at that as well as the actual cost itself. Good. And on the first one then. Rising block. Great. I'm glad you asked that. So why are we doing it? We have at least GBP 3.2 billion to spend on water resources out to 2050. In reality, it's probably going to be more because as you reduce your abstraction, you've got to replumb the network, as we've already talked about. So there's a lot of cost associated with that. So rising block tariffs allows us to find a demand-side solution to step into this water resource challenge, which is critical. So Ofwat hasn't pushed us to do this. They've encouraged companies to do it. And the challenge is, of course, and I think I've mentioned this on previous calls, understanding how many people are in each household to set the right amount of base consumption is really tricky. Hence why you've got to start small with the trials. And obviously, we're in a good position. We're installing Kraken as we speak, and we're rolling out smart meters. So universal metering by 2035. So we've got all the right conditions to start doing these trials and bring down consumption. And I should say, though, we are one of the leaders on PCC as well. So I think that puts us in a good position on one of the ODIs, at least. Very good. I'm just going to say a couple of questions. I'm going to come to you, AJ, in a second. I'm going to say a couple of questions that were submitted in advance. So one is from so Thomas Martin asked a couple of questions. So one then, Helen is, how does the draft determination treat your accelerated investment of the GBP 450 million of transition spend that goes into the last year of AMP7? Is that included in the AMP8 TOTEX? So is that included in the RCV growth rate? Yes. So in the RCV growth rate, the 28%, it assumes it happens in AMP8, but it will get adjusted. Well, the actual amount that we spend will get adjusted as a midnight adjustment for the end of AMP7. If you're looking at Ofwat's financial model, you'll see 24%, but that's why we're quoting the 28% because it takes it out. It takes it back out. Right then. Next question in the team. Same chat. So again from Thomas. When he reads through the documents, it feels like that the CapEx is more heavily weighted than the OPEX situation. So he's wondering whether the CapEx as a percentage of TOTEX, based on the DD figures, might be lower in percentage terms than in the business plan. So he's asking for any more insight we can give on the new revised DD versus our plan on CapEx-OpEx split. The answer would be yes. I won't be able to give you the precise number now. I'm sure we can do that. No, we don't need to follow up. The point is yes. So broadly, you will see a slightly higher CapEx number. The enhancement is more CapEx. So if you're cutting enhancement, yes. Yep. Yep. Good. Okay. So hopefully that helps. Good. I'm going to come to Verity's questions in a second, but I'm going to take AJ's question first. Hi. Thanks a lot for this call, by the way. It's really helpful. My answer is around financial resilience. I don't know if you could just flesh it out for us a little bit more. But I think at the business plan proposals, the assumptions going in for dividend yield were different for the three listed companies. Yours was closer to 4, and I think Pennon was closer to 2. And when I look at the proposals that we have at the moment, I think everyone's assumed to be 2. And I'm just wondering, do I just ignore that, or is that how much cash you can pull out of the operating company, or what parameters do you need to look at when dividends are paid at the regulated entity to the holding company? Generally, just looking at the sector as a whole, maybe because your leverage is a pretty strong position, what are the restrictions that these financial resilience measures are putting in place? Okay. So I'll take those then. So the first way to view it, I think, is that in the Ofwat's document, they reference the fact that they would assume that you need to put equity into the business. What they've not done, though, is they've not remembered, or they've not factored in that we put in GBP 1 billion worth of equity into the business. So it's just an error. So it needs to flow through. So we've got a query out to Ofwat that says, "Okay, you recommend that we should go from 4% to 2% on our dividend and that we need to put in GBP 500 million worth of equity." Actually, we've put in GBP 1 billion worth of equity 24 hours before the price review process. And Ofwat themselves quote that regularly. So I'm sure that when we have the conversation with them, they'll look at that and say, "Oh, yeah, fair. You're right. We should be taking into consideration that GBP 1 billion worth of equity." I think for other people in the sector that put money in AMP7, they put it in to make up their balance sheet. We didn't put it in to make up our balance sheet. We put it in as a pre-fund for AMP8. It's one of those things that I suspect has got lost and just needs flowing through. So I can't comment on anybody else's dividend policy, but for us, we would then fall in line with the rules, which are if you've put over GBP 500 million worth of equity in, then you're in line to be allowed to pay a 4% dividend. That's what that would say, according to their methodology. So yeah. Now, we can't talk about dividend policies, but it's very much an after-final determination conversation. But hopefully, that solves that one question for you. Can I add a little bit to that? So that 4%, sorry if I spoke over. Oh, go ahead. I might be a bit of a lack of it. The 4% then, so every time you pay cash flow out to yourselves, can you say the 4% is your base, and then do you justify the outperformance on top? And that then is the full amount that you can pull out, or is that how it works? Can you just go through that piece just so I understand? So your dividend policy is based on you have to do a fair, balanced, reasonable dividend policy that is based on all your levers of outperformance. It's based on your non-REG business, and it's based on any historic outperformance that you carry across to the next AMP. So when we do consider our dividend policy for the next price review, we will consider ODI outperformance for the last few years of this AMP. We'll look at our wider environmental considerations and feel comfortable whether they're good and strong. We'll look at any financing outperformance and how we feel about that for the future. And we'll look at the contribution from the non-REG business. And that could be property. It could be green power. It could be the services business. All of those things will factor in. We'll look at the base of regulatory dividend that feels right in line with our price review process. That's how we'll make that decision. Thank you. Good. On the wider sector stuff, I mean, again, I think Ofwat have been quite clear in what they're saying here. And yeah, I understand exactly where they're coming from. So their perspective is that you want companies to be financially strong and resilient to be able to withstand changes in life. Right? COVID, we couldn't have predicted. The Ukraine war, we couldn't have predicted. Supply chain, sudden increase in cost, I guess, maybe we couldn't have predicted. So they're just trying to say, "Make sure you're in a position to manage that." And they've given some guide rails around that and said, "Here's the guide rails." And we've always said that we feel comfortable being up to 70% geared. We've always said that actually we'd rather be mid-60s to high-60s as well as being traditionally long-term or very low at the moment. That is not unusual for us. I can remember being 57.5% geared on my very first day when I arrived. So this is, we tend to go through periods of time like this. We then invest steadily, and then we get back to the mid-60s. So we feel confident in our position on financial resilience. We've been named as a financial resilient leader for each year that Ofwat's has done its financial resilience report. And so we feel like we've got a business that is primed for the next journey, which is not just going to be 5 years. I guess one of my frustrations with the models of the analysts on the calls is you typically only call RCV growth through till 2028, 2029. I think what the draft determination shows is you're going to see pretty impressive RCV growth for the next 15, 20 years. And I think that needs factoring in to some of those assumptions on an ongoing basis. But the financial resilience looks at all of that. So that's all that Ofwat is saying is make sure that as an organization, you are in prime financial resilience position. Good. So I've got Verity's questions now. I'm going to do those next, if that's all right. And we'll see if anyone else has got any further questions thereafter. So Verity, so first one then is you want to understand more about the bespoke ODI, which is capital carbon. So Shane, do you want to talk about this? Yeah. So this is part of our ambitions in relation to net zero. So we're achieving scope 1 and 2 by 2030, but we can't forget scope 3. And Ofwat did encourage a number of companies in the lead-up to the draft determination to submit a bespoke ODI in relation to capital carbon. And that's what we've done. And so what it looks to do is bring down the use of carbon in our designs between two internal gated processes. If we are successful in doing that and we record that and document it, then we can generate some outperformance. So it's important to start incentivizing companies to find new and innovative ways to use less carbon in things like concrete and other areas. It's really exciting because it is a bit of a game changer for our capital teams to find new and innovative ways of delivering an investment program, which is only going to get bigger as Liv has talked about out to 2050. I think the other thing I'd add is we've got a distinct advantage on this because we've got our in-house design team who are already measuring carbon for every scheme that we do. So yeah, I think we're really well placed on this ODI. Very good. So Verity, your second question, but I guess I can ask what I think of the question, or you're live now on our screen. Do you want to talk live? Oh, yes. Thank you. I didn't know whether you were going to take my call. It's just something I found in the depth of the document. I mean, obviously, you raised GBP 1 billion of equity, and you clarified that that doesn't seem to have flown through. So they've got an assumption of GBP 484 million. But then I read something about you've got about GBP 636 million of reduced allowed revenue relative to your plan in terms of operating expenses, which you wanted to bring forward. So do the two net themselves off? Yeah. No. Don't think of them that way, right? So I know it looks convenient, like two numbers that add up to one number, but they're not. So the only reason that we had the levers like that is because Ofwat had the very, very low 3.29% assumption. So the only way to make the plan whole was to say, "We'll put the 3.29% WACC in, and then we'll use the levers, knowing that Ofwat are going to change the WACC for a more realistic WACC number as time came down the line." So that's the GBP 600 million. It's part of that piece of work. But we said at the time, "Don't believe this because it's going to change." Ofwat have now updated for a current-ish WACC. We know that will move again by the FD for a more realistic WACC in terms of cost of debt, as they've said themselves. We'll need them to flow through the equity raise into their model as well, as we've just answered a second ago. And then we will also think there is some evidence on a little bit of use they've maybe gone too far on the levers use now. So we need to talk to them about that. So this is not an unusual position, based on my track record anyway, of where every AMPs I've been here, you make progress for each side to understand its position at the draft. But actually, you need to have a further conversation because the individual business needs to then be financeable by the time you get to the FD. At the moment, we now need the latest numbers across a whole heap of things to make that final call on what the levers should be. Great. Thank you. Very good. So I think we've got no more questions. So we'll give it 10 seconds in case anybody wants to ask one last question. Just put your hand up and let us know. I don't think anybody has. All right then. Well, in which case, a big thank you to so many of you for dialing in today. I'm sorry that we haven't got every last answer. There are a lot of documents to call through. So we've all read about 3,000 pages in the last few weeks. And of course, we've read all of our competitors' documents as well. So we're gaining speed, I guess, in terms of understanding, but there's a long way to go. And we'll talk to you next formally at the half-year results. That'll be the next proper update. By then, of course, we'll have submitted all of our evidence and consultation related to this. We'll be getting closer to the FD sometime around about Christmas. But we appreciate all of your engagement on the topic. We know that our job is to make sure that we run a good business in Severn Trent now and for the long term. Thank you so much for listening.