Northumbrian posts profit rise ahead of Ofwat decision

23rd Nov 2009 07:04

Northumbrian Water said the final decision by the regulator Ofwat on how much it can charge customers over the next five years is a 'key risk' as it posted a rise in profits on the back of previous price rises.The firm which operates water and waste services in the northeast of England, saw pre-tax profits rise to £87m in the half year to September 30 from £77.1m over the same period the previous year on revenues that climbed to £351.2m from £347.7m. Higher tariffs and reduced spending helped it offset a decline in customer usage and the closure of businesses in the northeast to post a rise in pre-tax profits. The dividend was lifted to 4.39p from 4.29p.Capital investment during the period fell to £108.7m from £109.3m.Northumbrian will find out on November 26 how much it can raise customers' bills in the five years from April 2010, when the final determination on price limits is released by the regulator Ofwat. It said that it had met with Ofwat on September 30 'to make representations and to clarify specific company issues to the regulator before the announcement of the final determination.'In a surprise move, Ofwat in July called on water companies to cut bills, prompting Thames Water to say it is considering a legal challenge.Northumbrian said that economic conditions continue to be challenging, but that efficiency initiatives leave it well placed to respond.