NORTHUMBRIAN Water Group increased pre-tax profits by 11 per cent to £170.2m last year, after raising prices by three per cent to offset higher costs and bad debt, it announced yesterday.
The utilities group, which supplies water to 4.4m customers in Northumbria, Essex and Suffolk, also moved into post-tax profit despite the temporary closure of its biggest industrial customers due to the downturn. The full-year dividend of 13.2p is up 3.5 per cent and the firm has enough short-term cash deposits to run the business without further loans until at least December 2011, it said.
Heidi Mattrill, who was appointed chief executive in March, said: “It’s very encouraging to come into a company with such a good set of results.
“We are taking our time to look at long-term investment and decide if and when to take further loans, but we are coming from a strong position. Business closures amongst our customers appear to have stabilised,” she added.
The group will take part in Ofwat’s five-year, £1.2bn investment programme, upgrading pipes and extending its reservoir in Essex. It said in December it would accept the watchdog’s “tough” pricing settlement.
Deutsche Bank analyst James Brand described the results as solid, but largely in-line with expectations. “We see UK water as attractive in the current environment of macro uncertainty, with the review out of the way now, visibility on the next five years and growing dividends.”