Affinity Water pre tax profits hit as finance and operating costs rise
Affinity Water reported a 41% fall in pre tax profit to £26.8m for the year to 31 March 2017 as finance costs, and cost of sales rise.
Operating costs for the report year were up £10.5m (4.4%) to £248m driven chiefly by increases in wages of £10m, inflation by £5.2m and greater depreciation due to newly commissioned assets at £5.3m offset by various decreases. Operating profit was down year-on-year by £4.5m to £77.8m on revenue up £6m to £398.7m.
The company held no financial derivatives for the report year. Net finance costs were up £14.3m at £51m due largely to transaction costs in a partial bond buy back and inflation on index-linked debt.
Infrastructure renewal was down £1.6m to £17.9m nevertheless asset related expenditure was higher than budgeted in the firm’s business plan owing to accelerated mains renewals. Future asset expenditure will outstrip the budget as first-year AMP6 projects have been pushed back.