Wessex returns to profit

Wessex Water has published its full-year results for the year to 31 March 2025.

Revenues increased by 13.6% to £652m, and operating profit grew faster by 19%, through a lower growth in costs to £165m. Wessex returned to profit before tax of £17m compared with a loss of £43m in the prior year, given lower financing costs. Wessex increased capex by 12.9% to £446.5m, pushing up regulatory gearing to 71.9% from 68.8%. Despite the board paying “particular attention” to gearing, Wessex declared a dividend of £66.5m, representing a yield of 5%. The board has also agreed a pension payment recovery plan, given the latest actuarial deficit was £35.3m.

Performance highlights included Wessex being in the top two water and sewerage companies for the water quality Compliance Risk Index throughout the 2020-25 period, although it missed the target of zero in the last two years. Sewer collapses remained consistently within target throughout the period as did void sites, sludge disposal, drought risk and delivery of priority services. Wessex was ranked second among water and sewerage companies for C-MeX in 2024–25 and remained within the top three throughout the 2020-25 period. Treatment works compliance just missed 100% in the last two years.

However, unplanned outages rose during the final two years of the period; water supply interruption targets for the first three years were met but Wessex underperformed in 2023–24 and 2024–25 due to three major incidents. Internal and external sewer flooding targets were also missed in the last two years, along with sewer flooding risk targets and leakage targets.

Pollution incidents exceeded targets in four out of five years, with the highest occurrences during the final three years – but there were no serious pollution incidents in 2024-25. Both the Event Risk Index and water quality customer contacts failed to meet targets in the last two years of the AMP. Wessex therefore met 30 out of the 46 Performance Commitments (65%) set for 2024-25.

Chief executive Ruth Jefferson reaffirmed the company’s commitment to use nature-based solutions across its region. She also mentioned its commitment to address PFAS leaching from sludge. The company said it launched a Marketplace challenge in October 2024 focused on PFAS. This is a potential price re-opener in the PR24 price determination.

Wessex does not anticipate supply issues over the summer of 2025. The board hope for an improved final determination from the Competition and Markets Authority.