Wessex reports operating profit and capex uplifts

Wessex Water reported operating profit up by 25.3% to £97.7m in its half-year results on 11 December. Overall operating costs grew more slowly than allowed revenues, even though labour costs of £89.9m were up 14.9%, partly driven by an increase in headcount to drive operational improvements and to deliver a step up in the capital programme.

Net capital investment for the six months was £248.0m, a 30.8% increase which, compared with some peers, remains consistent with the timing of the construction programme for the current regulatory period.

On performance, ten of its 13 key performance indicators were either stable or improving. Compliance with drinking water standards (CRI) reduced following an increase in customer tap failures, but the company expects to remain below penalty thresholds. Household water consumption (in common with many companies) remained above targeted levels. An increase in the number of total pollution incidents means Wessex will not achieve ‘leading’ company status in the Environmental Performance Assessment this year. 

Dividends declared for the six months to 30 September 2024 were £37m, unchanged from the same period last year. Regulatory gearing increased by 7.2% to 71.8%, driven by the step up in investment.