Wessex Water’s half year results published today show an increase in turnover of 2.8% or £7.3m from £263.3m to £270.6m, while profit before tax increased from £80.1m to £83.8m.

Capital investment for the six months totalled £98.1m, which was a decrease from £113.0m last year. Dividends declared for the six months to September 2014 were £70.3m - a reduction of £2.4m compared to the same period last year. Regulated tariff turnover increased by £8.0m due to the 3.1% price increase.

In its interim financial results for the six months to September 2014,  Wessex Water has reported high levels of operational performance and that it was on course to once again beat its leakage target. The Consumer Council for Water also reported that Wessex Water had the fewest complaints per head of any company – a number which is continuing to fall.

On affordability, the firm now has more than 13,000 customers on its low rate social tariffs and around 16,000 customers are benefiting from its tap programme which offers customers tailored solutions to their problems via a range of schemes and low rate tariffs. Wessex Water’s Assist social tariff reduces charges to customers who are in extreme financial difficulty and allows them to make a modest contribution towards the costs of water and sewerage services in line with their ability to pay.

Operational costs increase

Operational costs (excluding depreciation and capital maintenance) increased by £3.9m from £80.0m to £83.9m. The main factors causing the increase were the impact of new processes, business rates, salary inflation, a rise in energy prices and general inflation.

Wessex Water said it will invest further to keep the flooding risk at a minimum level, even in the face of climate change, which is causing more extreme storms. To date the company has delivered 496 outputs in AMP5 and are currently on target to deliver the 527 flooding outputs targeted in 2010-15.

Wessex said it is continuing to make good progress in terms of operational performance and capital investment, and is on target to meet all its 2010-15 milestones and regulatory outputs. The utilty has once again topped Ofwat’s Service Incentive Mechanism (SIM) league table in 2013-14 for the third year in a row, making it the best performing water and sewerage company in England and Wales.

However, the firm said that after several years of excellent performance the exceptional level of rainfall at the start of the year has again significantly contributed to the number of pollution incidents reported, commenting:

“We are making every effort to improve our performance in this area and are implementing a pollution action plan to achieve this.”

Water resources a key focus

In June Wessex Water published a water resources management plan which set out how it will ensure water supplies remain resilient for the next 25 years. The company’s investment in developing a regional water supply grid, which will improve security of supply to customers and help meet demand for water in the long term, is integral to its plan.

Now half way through the scheme – the largest ever undertaken by the company – it includes new pipelines, storage tanks and pumping stations, so water can be moved from areas of surplus to places of deficit.

Wessex Water said that as the demand for new homes in the region increases it is working closely with developers and other stakeholders. The government is increasingly interested in the servicing of new developments, including greater scrutiny of the levels of service provided to developers by water and sewerage companies. This is expected to result in a ‘Utilities Charter’ sometime in 2015. 

Wessex Water said it is continuing with its catchment management.strategy to address deteriorating raw water quality which in the past has often triggered multi-million pound investment in water treatment works. The firm’s catchment management specialists are working to identify potential pollutant pathways and find alternative management practices that protect and improve groundwater quality at 15 sources.

Largest single AMP5 pipeline maintenance scheme completed on time and under budget

During the period the firm completed construction of the major process extensions and extensive maintenance works at Sutton Bingham, which serves the Yeovil area, and the works is in the final stages of commissioning. The £13m project includes improved additional treatment processes to deal with pesticides, taste and odour and manganese. Refurbishment at Ashford water treatment works, near Bridgwater, is also nearing completion.

In the summer Wessex also completed project Taunton Clean and Clear on time and under budget - the £16m project was the largest single pipeline maintenance scheme in AMP5.

Wessex Water is monitoring a significant increase in workload for private sewers -  the number of incidents attended on average each month increased by 82%. Over the past 12 months, private sewer incidents amounted to 10,548 of a total of 28,779 sewerage incidents (37%).

More work planned on energy generation from sludge

Wessex Water said it is planning to extend and upgrade sludge digestion facilities to further increase the proportion of sludge that it digests and to increase the renewable energy generated.  An increasing proportion of the firm’s sludge is treated using the anaerobic digestion process which reduces the volume of sludge to be recycled while generating renewable energy.

This includes the installation of advanced anaerobic digestion at Trowbridge and Taunton, and additional digestion capacity at Berry Hill, Bournemouth. The plant at Trowbridge has been installed and commissioning will take place over the next six months. Construction work at Taunton and Berry Hill is in progress with the main focus on the provision of additional digestion capacity which forms part of the advanced digestion facilities; this will also facilitate maintenance on the existing digesters.

Commenting on the results, Chief Executive Colin Skellett said:

 "We continue to make good progress in operational performance and capital investment and we’re on target to meet all milestones and regulatory outputs for this five year period.”

"In our business plan for 2015-2020 we have committed to investing further to improve services for customers and protecting the environment. Our customers remain at the heart of everything we do, which is why we sought views from more than 21,000 customers before putting together a plan that will see investment increase and bills to fall.

"We have extended our partnership work with the debt advice sector to help the minority of customers who struggle to pay and now more than 16,000 customers benefit from our affordability schemes."