Hike in profits at water group

A WATER company supplying around 1.7 million customers in Essex and Suffolk yesterday joined the ranks of firms to report a hike in profits on the back of price rises allowed by industry regulator Ofwat.

A WATER company supplying around 1.7 million customers in Essex and Suffolk yesterday joined the ranks of firms to report a hike in profits on the back of price rises allowed by industry regulator Ofwat.

Northumbrian Water Group, which includes the Essex & Suffolk Water business in the Chelmsford and Lowestoft areas, reported a pre-tax profit of £130.3million for the year to March 31, up 35.3% from £96.3million the previous year, on revenue up 9.2% from £541.6million to £591.5million.

Its core water supply business, including Essex & Suffolk customers and a further 2.6million homes and businesses in the north of England, increased its profit by 18.7% from £197.7million to £234.6million, on revenue up 9.3% from £508.2million to £555.5million.

Last week, AWG reported a 17% increase in profits at Anglian Water and substantially improved earnings have also been reported in the past week by United Utilities, South West Water owner Pennon and Severn Trent.


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Ofwat permitted above-inflation price increases for the period from 2005 to 2010 to support investment across the water industry.

Northumbrian said yesterday that its capital expenditure during the year was in line with Ofwat's target of £211.9million and that it was on track to deliver an investment programme of nearly £1billion by 2010.

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The group also said that it had met or exceeded Ofwat's leakage and environmental standards for the year, with its leakage performance in East Anglia - where resources were scarce - ranking among the best in the country.

With Abberton reservoir in Essex full and river and ground water levels in Suffolk about average, the company said it would have no need to impose water restrictions.

Northumbrian added that it would submit a planning application later this year for its major project to enlarge the Abberton reservoir, south of Colchester, which has been in preparation for 10 years.

The scheme involves changes to existing abstraction licences, providing new pipelines, raising the reservoir's existing dam by 3.2 metres and constructing four additional small dams.

Construction could begin in 2010 and once filled in 2014 the capacity of the reservoir will increase by 60%.

Managing director John Cuthbert said: “We are pleased to be reporting a strong set of results and a good start to this regulatory period.

“We have maintained a high level of operational performance, meeting our regulatory targets and delivering high levels of water quality, customer service and environmental standards.”

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