Sutton and East Surrey Water (SESW) reported flat profit before tax for the half year to 30 September as the firm had mixed fortunes in its Outcome Delivery Incentives (ODIs).
Profit before tax fell by £0.1m to £7.9m. Profit after tax was lifted by £2.1m to £8.5m largely by a tax credit arising from the government's reduction in future corporation tax rates to 17% resulting in a net tax credit for the six months of £0.6m following a charge of £1.6m in the same period last year.
Operating profits ticked up £0.3m to £10.7m as operating costs increased 2.4%) to £21.7m filed by a pay award from 1 April 2016 and i preparations for the opening of the market for business customers from April 2017.
Net interest costs for the half-year were up £0.5m to £3.3m largely due to the impact of inflation on charges from the company’s £100m index linked bond.
The newly branded business retail arm SES Business Water clocked up £1m a year in sales in Scotland.
Revenue for the whole business during the reporting period was up 2.5% to £32.4m with water supply income near unchanged at £29.7m.
The company reported sound performances against its ODIs for drinking eaten quality, supply interruptions and mains burst numbers. But complaints outstripped the number allowed for in its ODI, at 4.2 complaints per 1,000 customers although the level was down on last year and below the industry average.
This contributed to SESW's ranking of 17th of 18 in the latest Service Incentive Mechanism survey.
In his summary statement, the company chairman, Jeremy Pelczer, said ODIs were a, “central focus of the company’s monthly performance reporting to the board, and are prominent elements of the bonus schemes shared by all our employees.”