Profits dip for Northumbrian Water

WATER group Northumbrian, which includes the Essex & Suffolk Water business, yesterday reported a dip in half-year profits following a sharp increase in energy costs.

WATER group Northumbrian yesterday reported a dip in half-year profits following a sharp increase in energy costs.

Revenue for the six months to September 30 was 4.2% up on the same period last year at £347.7million but pre-tax profits came in 12.4% down at £77.1million.

Northumbrian, which includes the Essex & Suffolk Water business in mid-Essex and the Waveney valley, said its energy costs were 50% up on the same period last year - well above the level assumed by industry regulator Ofwat in its last price review.

However, the group said its capital investment of £109.3million during the period, including an extended sewer flooding programme, was meeting regulatory targets and it continued to achieve high levels of customer satisfaction.


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Managing director John Cuthbert said: “Over the last six months, the group has produced good financial and operational results, in spite of a difficult economic climate and the continued volatility in energy markets.

“The group is seeing the benefit of low cost debt secured to fund the capital programme through to 2011,” he added.

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Under a draft five-year business plan submitted to industry regulator Ofwat in August, Northumbrian is proposing a £1.3billion capital programme - a 22% increase on the last five years - which will see bills for its Essex and Suffolk customers rise by 2.8% above inflation.

The group is seeking permission for a major expansion of capacity at its Abberton reservoir, near Colchester, with its plans having been recommended for approval.

Northumbrian is planning to pay a interim dividend of 4.29p per share, up 7.2% on the 4p per share payout at last year's half-year stage.

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