Increased half-year profit for Anglian Water Services
- Credit: Archant
Anglian Water Services (AWS) has reported increased first half revenue and profit – despite a lower than permitted increase in bills for the current year.
The company, which supplies water to 4.3million customers across eastern England, saw turnover of £637.3million in the six months to September 30, up from £624.8m in last year’s first half.
It said the 2% increase reflected an inflationary price increase of 2.6%, offset by a small reduction in demand due to the wet spring and relatively cooler weather in July and August compared with the previous year.
A decision not to increase prices by the full above-inflation amount permitted under the current regulatory regime meant that customer bills would be around £10m lower for the current year, AWS added.
Operating costs grew by 4.8%, from £227.7m to £238.7m, with increases related to general inflation, higher rates and new plant being partly offset by efficiency savings and reduced bad debt charges.
The rise in costs, combined with a 3.3% increase in depreciation, saw operating profit fall by 1.1% from £262.9m to £260.0m.
However, a fall in net finance charges for the period from £176.0m to £155.1m, largely reflecting the impact of lower inflation on index-linked debt, left underlying pre-tax profit 20.7% higher, at £104.9m against £86.9m.
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AWS said the level of water resources available in the region remained “healthy”, with rainfall over the 12 months to the end of September having been 122% of the long-term average, despite a number of below-average months including September when rainfall totalled just 27% of the the long-term average.
The Drinking Water Inspectorate’s annual report, published in July, had said that the overall measure of drinking water quality compliance in the region remained excellent, at an average of 99.96%. Leakage levels also remained on par with the previous year, following relatively benign winter weather.
All 48 of the designated bathing beaches in the region met or exceeded European standards this summer, for the 13th consecutive year, AWS added.
Capital investment by AWS during the first half totalled £175.4m, down from £214.5million in the same period a year ago, but the company said it remained “in a good position” to deliver fully on its obligations for the remainder of the current regulatory period, which ends in March 2015.
AWS added that discussions had continued with regulator Ofwat in relation to the new regulatory period, running from 2015 until 2020.
“A revised plan was submitted in June 2014 following initial feedback,” the company said. “Ofwat’s Draft Determination was issued at the end of August, and the outcome of subsequent additional customer consultation and further modelling was presented to Ofwat at the beginning of October.
“Our revised plan has been praised by Ofwat for its high quality, and the independent Customer Engagement Forum was able to ‘commend it to Ofwat’. We now await Ofwat’s Final Determination, due on December 12.”