Reflecting price increases set regulator, Ofwat, Northumbrian Water’s revenues grew modestly in the period on the back of steady demand. Operating costs grew 2.9 per cent in the period, to £218m, as the group's higher asset base meant greater depreciation charges, while pension costs were also higher. But these were offset slightly by lower power costs, with savings fixed up to March 2015. Overall, group operating profit grew 8.6 per cent to £151m.
Capital investment is currently in line with levels set by the regulator and two pipeline contracts for the expansion of the Abberton reservoir have been awarded - helping ensure future water supplies for Essex. Northumbrian also obtained planning permission to run an anaerobic digestion plant at Howden, North Tyneside; that's similar to its Bran Sands project. These, along with a hydro-electric plant at Selset, mean Northumbrian will derive 20 per cent of its power from renewable sources by 2013. Still, management did note the North East’s high dependency on public sector jobs, which could suffer as government austerity measures bite, and it will keenly monitor bad debts next year.
Investec Securities expects full-year adjusted pre-tax profits of £174.7m, giving adjusted EPS of 25.3p (2010: £170.2m/25.5p).
Northumbrian Water (NWG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 333p | MARKET VALUE: | £1.73bn | |
| TOUCH: | 332-333p | 12-MONTH HIGH: | 364p | LOW: 245p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 72p | NET DEBT: | £2.27bn | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 351 | 87.0 | 12.2 | 4.39 |
| 2010 | 369 | 89.7 | 17.0 | 4.72 |
| % change | +5 | +3 | +39 | +8 |
Ex-div:14 Dec Payment:27 Jan | ||||
