The North East鈥檚 water supplier saw almost 拢150m wiped off its revenues after its industry regulator imposed contentious bill reductions on it.
Northumbrian Water - which also supplies water to homes and businesses in Essex and Suffolk - has released accounts for the year ending March 31 which show that its revenues fell from 拢900.4m a year earlier to 拢758.4m. Over the same period, operating profit reduced significantly to 拢195m and profit for the year more than halved to 拢70.1m.
The reduced turnover was attributed mostly to a loss of regulated revenue after water industry watchdog Ofwat imposed average bill reductions of around more than 拢100 per household.
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Northumbrian Water had proposed a slightly smaller cut, arguing that research showed its customers wanted it to balance bill reduction with investment in cutting leaks and other environmental measures. The row was eventually taken to the Competition and Markets Authority, which gave a ruling that was a compromise between the two positions.
In the accounts, Northumbrian Water says: 鈥淩evenue was 拢758.4m for the year ended March 31 (March 31 2020: 拢900.4m). The reduction of 拢142m principally reflects the outcome of the Ofwat PR19 FD which reduced allowed regulatory revenue by around 拢129m.
鈥淭he CMA FD redetermination will come into effect in revenue from 2022/23. The regulated revenue reduction has been further exacerbated in the year by the impact of the Covid-19 pandemic.
鈥淭his had a particular impact on non-household revenue with reduced activity resulting in revenue being 拢25.6m lower than expectations. In contrast, household revenue was 拢19.5m higher than expected as a result of the change in working patterns during the year, with more of our customers working from home.鈥
In a separate performance report, the company said it hit 12 of its main 18 targets in areas such as customer service, the environment and communities, an improvement on last year.
The company also outlined its response to the Covid-19 pandemic, which included giving over its headquarters at Pity Me, County Durham, to become a vaccination centre and its contribution to the Chronicle鈥檚 Laptops for Kids campaign to get disadvantage children online during lockdowns.
The company announced this week that it had become the 海角视频鈥檚 first water company to achieve the Good Business Charter accreditation, which recognises responsible business practices. It also made the World鈥檚 Most Ethical Company List, and was recognised as being one of the country鈥檚 top places to work by the Great Places to Work Institute.
In the performance report, Northumbrian Water Group CEO Heidi Mottram says: 鈥淚 know we are building on strong foundations in areas such as customer service and environmental performance and in many aspects of our water business. Equally we know we have to improve our performance across areas such as leakage and water quality and must continue to address sewer flooding, in order to meet our stretching performance commitments and achieve our vision to be the national leader in our industry.
鈥淲e will also progress our longer-term goals, investing in the resilience of our assets and pursuing our goals to reduce carbon emissions and waste.
鈥淎s the world hopefully moves on from the global pandemic, we are committed to building back better. We are conscious of the financial consequences that some of our customers will face and will continue to provide support to all with affordability challenges.
鈥淚 also believe that the way we have managed through the restrictions, and the resilience we have shown, has created some new opportunities and we will embrace the prospect of a more flexible and adaptable business and workforce in the future.鈥
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