Northumbrian posts jump in profit after review of prices
NORTHUMBRIAN Water yesterday reported a higher annual pre-tax profit, helped by an increase in water and sewerage charges and steady demand from its customers.
Pre-tax profit rose six per cent to £181m in the year to the end of March, slightly above estimates of £177.6m. Sales were up five per cent at £738.1m, in line with estimates.
Water and sewerage charges at its Northumbrian Water unit, rose in line with the price review allowance of five per cent plus the November 2009 Retail Price Index of 0.3 per cent, the company said, adding that demand from domestic and industrial customers remained steady.
Income from its water and waste water contracts was up 4.4 per cent, Northumbrian added.
Last week, peers Severn Trent, United Utilities and Pennon also reported better than expected annual profits.
Shares in Northumbrian closed down 1.4 per cent at 357.8p.
Northumbrian shares have added 21 per cent since the end of January on talk that the Ontario Teachers’ Pension Plan, which has a 27 per cent holding, could build its stake.
At present levels, we still regard a bid as a possibility, but not a probability,” said Angelos Anastasiou of Investec who rates the stock a “hold”.