Wessex operating profit slips 7% as costs rise

Operating profit at Wessex Water fell year-on-year by £15.9 million to £212.5 million for the 12 months to 31 March 2020 as costs increased by £20.5m.

The increased operating costs included a £20.5m rise in depreciation and amortisation and a £6m in staff costs compared the previous year. Turnover for the reporting year was up £4.6 million to £552.3 million. Profit before tax fell £13.5m to £121.2m.

In the annual report Wessex chief executive, Colin Skellett (pictured), asserted the firm had “met every one of the five-year targets that were set, which demonstrates the effectiveness of our scheme delivery.”

He went on to say he was ”disappointed that the Ofwat price determination required bill reductions when the message from customers was that they favoured stable bills and more investment.”

He listed the company’s performance highlights including:

  • top place in Ofwat’s efficiency ranking;

  • good or very good rating of service by 98% of customers

  • “industry leading” status on environmental performance in the Environment Agency’s assessment; and

  • for the ninth year running, the lowest rate of complaints of any water and sewerage company.

Commenting on the results, Skellett said the “prudence” of Wessex’s owner, YTL, had “avoided the excesses of some companies who have engaged in special dividends, complex financial structures and offshore arrangements.”