South Staffordshire Water PLC, owners of South Staffs Water and Cambridge Water, have reported a £3.7 million fall in revenue in 2020/21 with the publication of its annual report and financial results for the period year ending 31st March 2021.
Non-household revenues declined by around 18% as properties became vacant throughout the year to comply with Government advice to cease trade. This led to a £3.7 million reduction in revenues in the business retail water sector compared to the previous year.
In contrast, the companies saw an increase in household measured consumption result in an increase in measured income of £4.6 million compared to the prior year.
The COVID-19 pandemic “has left its footprint across the financial performance of the business,” the report says. The main impact was a “material and sustained increase” in water demand – approximately 5% across both the South Staffs and Cambridge regions for the entire year.
The higher water demand led to a rise in production costs such as power and chemicals of approximately £1 million.
Operationally, the company was able to accelerate its infrastructure renewals expenditure during the year and made “slow but steady progress” in delivering its capital investment programme.
This included works to upgrade the two largest water treatment works at Hampton Loade and Seedy Mill.
South Staffs Water has recently received Ofwat approval for its upgrade plans at Hampton Loade, its largest water treatment works, as part of the Government’s green recovery initiative. As part of this the water companies in England Wales were encouraged to revisit their AMP7 investment programmes.
Built between 1966 and 1972, the plant has a capacity of 210 million litres a day and supplies around 700,000 customers in the South Staffs region. It is also the only water treatment works on the River Severn without a secondary treatment stage. The company submitted its proposal to Ofwat in February to install a ceramic membrane filtration system at the works – the first retrofit of its kind in the UK to an existing water treatment works.
Overall capital expenditure for the year was £44.2 million ( 2020: £45.3 million.
During the year the company missed its target of paying companies with turnover of less than £6.5 million within 30 days of receiving their invoice – the report says the utility “will look to see what (it) needs to do to improve performance in the coming year.”
Investors in the South Staffs Group consist of long-term pension scheme and institutional investors advised by Arjun Infrastructure Partners, which acquired a controlling 55.1% interest in the Group in July 2018. Mitsubishi Corporation manages a 44.9% stake in the Group.
Click here to download the Annual Report and Financial Statements for the year ended 31 March 2021.
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