Interim profit before tax at SES Water flat as costs and inflation grow
Profit before tax at SES Water for the six months to 30 September fell £0.4m year-on-year to £7.8m reflecting an increase in operating costs and the impact inflation on interest payments. Turnover for the period was down £0.6m to £31.8m due largely to a £0.4m fall in revenue from developers.
In his statement, SES Water chairman, Jeremy Pelczer (pictured), said: "Whilst we are pleased with the preparations we have already made for the PR19 Price Review, the level of customer participation, the complexity of the proposed new form of controls and the level of evidence needed to support justifiable expenditure allowances all create additional cost pressures at a time of rising inflation. Tight expenditure controls remain a prerequisite in this environment."
Operating costs increased by £0.7m to £22.3m in the reporting period. The company reported employment costs up 5.8% to £5.1m reflecting a pay increase and greater investment in retail services compared to the previous first half year. Operating profits were down £1.2m from the interim in 2016 to £9.5m this year.
The interest charge at the interim was hiked 33% to £4.4m by the impact of inflation on the company’s £100m index-linked bond.
Revenue from water supply income was unchanged at £29.7m. Price increases and demand up 3.8% from the previous interim – driven by new customers – was offset by lower usage by, and growth in the number of metered customers and a £0.4m drop in .