Water JV eyes greater flow of business

Tony Donnelly (left) says the focus is on controlled, organic growth. PICTURE: COLIN HATTERSLEY
Tony Donnelly (left) says the focus is on controlled, organic growth. PICTURE: COLIN HATTERSLEY
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A new player in the non-household water market is looking to grow “substantially”, targeting areas such as SMEs and the recently deregulated English market.

The firm, a 50/50 joint venture between Anglian Water Business (AWB) and Northumbria’s NWG Business, is known as Wave, and in August received clearance from the Competition and Markets Authority.

It is the second-largest water retailer in Scotland and the UK, set to report a turnover in excess of £500 million, and serving more than 250,000 business customers.

Tony Donnelly, chairman of AWB and co-chair of Wave, told The Scotsman that the new brand will be gradually introduced to customers in the coming months.

It also boasts a 25 per cent market share in Scotland, and about 20 per cent across the UK, and aims to expand both north and south of the Border, growing its customers and creating jobs.

Donnelly said: “I would anticipate growth in staff numbers going forward, over and above the current 20 for the Wave business.”

He said this could come from areas such as adding backroom services in Scotland to support its growth, and the possibility of having a Wave Scotland brand supported by standalone staff.

“I hope to grow staff in Scotland as part of what we’re doing and… crucially, as our business does expand, the bulk of the money that we generate in additional turnover is reinvested here in Scotland,” he added. “We have an absolute commitment that we want to be part of the Scottish business community.”

AWB was awarded the £80m Scottish Procurement contract in March last year, responsible for billing more than 15,000 public body sites. “That gave us quite a significant leap in Scotland,” Donnelly said.

As Wave it will continue to operate the three-year Scottish Government contract, a three-year deal saving millions annually.

Donnelly also flagged the deregulation of the English water market in April this year, opening the floodgates for 1.2 million businesses, charities and public sector organisations to choose their own supplier. It follows the move by Scotland in 2008, opening up the market for about 130,000 organisations, and with the biggest competitor Scottish Water unit Business Stream.

Donnelly noted Wave's active pursuit of the SME market, and sees potential in the industrial and commercial sector, with the focus overall on organic growth “in a controlled way”.

He also highlighted the securing of contracts worth £35m since April this year, adding: “What we’re seeing more and more, now that the market’s opened in England, is that a lot of people are looking for a UK-wide supplier."

Looking at the aim for Wave several years down the line, Donnelly says it is to be the go-to for customers in the markets where it operates, amid high competition.

“Growing is not easy. We aspire to do so. I would like to grow substantially and I would like to see an increased margin in our business here in Scotland and across the UK.”

He also cited Anglian’s involvement in Scotland since 2000. “We would hope to be involved for a whole lot more than that going forward.”