Growth in costs year-on-year wiped £13.7m off operating profit at Affinity Water taking it to £58.6m for the year to 31 March 2019.
Income of £11m from the sale of its non-household retail business in 2018 along with a £2.39m fair value loss on financial derivatives was offset by a £4.38m to leave profit before tax at £13.7m – down by close to 62% from the same period in the previous year.
Staff costs up nearly £4m with depreciation on plant up by close to £4.5m contributed to a 7% increase in operating cost to £271m.
The company paid dividends of £6.6m – down from £58.5m in 2018 – with none of related to the regulated business from which £50.5m was paid out in 2018. The company said reduced payment reflected anticipated regulatory penalties for its failure to achieve its leakage reduction target for 2017/18 and 2018/19.
The company said a “significant contributor” to its failures to meet leakage targets for both years was a large burst at one of its largest treatment works.
Affinity reported that the burst was discovered in 2018 that ran for a large part of 2018-19 and was subsequently discovered to have had started in the previous report year. So the firm missed its 2018-19 target had to re state its 2017-18 leakage which led to it failing to hit that year’s target too.
Revenue was up to £311.6 million from £308 million in 2018.