Profits up at water firms
Profits poured in at Severn Trent and Northumbrian Water
Wednesday, 06, Jun 2007 11:33
UK utility firms Northumbrian Water and Severn Trent have both reported an increase in annual profits.
In separate statements today both water companies said that their performance had improved in the year ending March 31st.
Northumbrian Water, which supplies about 4.6 million people in England and Gibraltar, said its pre-tax profit climbed 13.4 per cent to £147.8 million over the year on the basis of higher water and sewerage charges levied to support continuing "high" capital investment in services.
Severn Trent, which serves more than 3.7 million homes and businesses in England and Wales, also saw its pre-tax profit rise 9.5 per cent to £252 million in the same 12-month period.
However despite spending almost £20 million trying to cut the level of leaks from its water pipes over the year, the Birmingham-based company warned that it was unlikely to attain the annual leakage target set by industry regulator Ofwat.
In contrast, Northumbrian Water said that it had met leakage targets for the eighth consecutive year.
Severn Trent, which has just undergone a restructuring programme in order to focus on its water business, also announced plans to axe several hundred jobs in order to cut costs.
The company, which recently demerged its Biffa waste disposal unit and sold US Laboratories along with its property division, said 600 posts would be lost over the next five years.
Severn Trent chief executive Colin Matthews nonetheless stressed that the company's management were "committed to the single minded pursuit of continuous improvement" following the restructuring on the group.
Meanwhile customers of Northumbrian Water are set to benefit from the company's "strong performance".
The Durham-based firm said that given the increase in its annual profits, it would not introduce prices by the full amount above the retail price index authorised by Ofwat.
"Alongside high standards of service, customers will now benefit from bills that will be lower than they would have otherwise been," said Northumbrian Water's managing director John Cuthbert.