The North East’s water supplier saw almost £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 £900.4m a year earlier to £758.4m. Over the same period, operating profit reduced significantly to £195m and profit for the year more than halved to £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 £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: “Revenue was £758.4m for the year ended March 31 (March 31 2020: £900.4m). The reduction of £142m principally reflects the outcome of the Ofwat PR19 FD which reduced allowed regulatory revenue by around £129m.
“The 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.
“This had a particular impact on non-household revenue with reduced activity resulting in revenue being £25.6m lower than expectations. In contrast, household revenue was £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.”
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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’s 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’s first water company to achieve the Good Business Charter accreditation, which recognises responsible business practices. It also made the World’s Most Ethical Company List, and was recognised as being one of the country’s top places to work by the Great Places to Work Institute.
In the performance report, Northumbrian Water Group CEO Heidi Mottram says: “I 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.
“We will also progress our longer-term goals, investing in the resilience of our assets and pursuing our goals to reduce carbon emissions and waste.
“As 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.
“I 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.”
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