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Dee Valley profits down amid tougher price controls

Dee Valley Water has reported a drop in operating profit of £900,000, as the company’s revenues felt the impact of tougher PR14 price controls.

In its financial report for 2015/16 the firm said revenue was down £1.5 million to £23.1 million, which it put down to a reduction in prices at the PR14 final determination.

However, the downturn was mitigated by an improvement in operating expenses and financing costs, the group said.

Dee Vallely chief executive Ian Plenderleith said: “We have made significant commercial changes to the company which have increased our operational performance and sharpened our focus on providing an even better service for our customers.”

Ofwat’s qualitative customer experience survey for 2015/16 placed Dee Valley Water second for billing, seventh for clean water, and fourth overall out of the 18 water companies in England and Wales, all “significant increases” on the previous year.

The company’s service incentive mechanism performance was 83.5 out of 100, surpassing Ofwat’s target for the company of 80.

Mean zonal compliance (level of compliance with drinking water standards) improved in 2015 to 99.95 per cent, which is the industry average. And discoloured water customer contacts for 2015 were 1.32 per 1,000, compared with 2.28 the previous year.

“All of these key indicators confirm that we have made strong progress improving our operational performance this year. Alongside the financial certainty provided by the agreement of financing at favourable interest rates, this ensures the group can progress confidently into the second year of AMP6,” said Plenderleith.