South West Water posted an increase in its pre-tax profit of 3.3 per cent to £167.9 million, up from £162.5 million, because the impact of a tariff price freeze was more than offset by an increase in new connections and cost efficiencies.
Total revenue for the water company also grew by 0.4 per cent, reaching £522.2 million for the year, up from £520 million. The new customers contributed £2.8 million to the revenue.
Further cost efficiencies and lower debt costs helped to more than offset the £4.8 million loss in revenue that occurred due to customers switching to meters or assessed charging.
South West Water chief executive Chris Loughlin said the company is “well placed to meet the challenges and opportunities of the next regulatory period” but recognises “there are improvements still to be made”.
He said that South West Water is making a “smooth and confident transition” into the next regulatory price control period.
Chairman of parent company Pennon Ken Harvey added that being awarded enhanced status by Ofwat during the PR14 process will “lead to a tangible financial benefit” for the company over the next five years as it has been able to start its AMP6 work early.
Pennon saw its pre-tax profit increase by 1.6 per cent, up to £210.7 million. This includes a £27.7 million of pre-tax profit made by recycling and energy recover company Viridor.
Pennon group director of finance Susan Davy said: “The group has delivered a resilient financial performance, underpinned by strong liquidity and efficient long-term financing.
“This has allowed us to continue our track record of consistent, sustainable cash returns to shareholders.”