South Staffs sees significant profit increase

(by Verity Mitchell)

South Staffordshire Water Group has reported full-year results. Revenues increased to £195m from £153m from higher regulated tariffs and water consumption. Operating profit grew 78% to £49.4m from £27.7m, and profit before tax was up 236% to £23.2m from £6.9m. Bad debts remained stable at 4% of household revenue. The company incurred £1.2m of costs from the significant cyber attack in 2022.

Capital expenditure was £75.2m (2025: £41.2m). Management said it had delivered above target on meter installation – 24,805 meters compared to a target of 20,646 – and renewed 250km of mains. Regulatory Capital Value grew by 3.5%. Gearing was 61%, down from 66.4%.

The business paid an interim dividend of £4.2m during the year. The board approved a second interim dividend totalling £6.7m (2025: £4.2m). This represented a 4% base dividend yield of regulated equity (2025: 2.1%).

South Staffs’ customer service performance metrics remained below average. The company expects to be ranked ninth in the sector for C-MeX, ninth for D-MeX and 15th for BR-MeX. In addition, the company failed to reach its targets on water quality contacts, mains repairs, discharge permit compliance and greenhouse gas emissions. But it achieved its targets in 11 other categories, most notably leakage reduction and per capita consumption (household and business) in both South Staffs and Cambridge areas. 

The company recorded no serious pollution incidents during the year, but seven Category 3 pollution incidents. Management said it is making progress on reducing supply interruptions and unplanned outages but was disappointed with the number of mains bursts and water quality contacts, and faced challenges in lead pipe replacement.