SWW announces tariff freeze as profits rise

South West Water (SWW) has announced it will freeze all standard tariffs and standing charges until April 2015, as it posted a 7.6 per cent increase in profit before tax to £87.3 million.

According to its half year results for the six months to 30 September 2013, SWW’s profit was up due to “higher revenues, rigorous cost controls and efficiency delivery ahead of expectations”.

It is therefore not taking up the four per cent price increase that would have been allowed under its current regulatory agreement.

SWW, which currently has the highest bills in the country, also said it would keep average bill rises below inflation to 2020.

In the same period, Pennon Group, owner of the water company, saw its overall profit before tax increase by 3.5 per cent to £110.9 million

The company’s waste management division, Viridor saw its profit before tax down 28.8 per cent to £15.3 million, which the company said was “in line with management expectations”.

Pennon’s revenue was up by 5.3 per cent to £667 million, while it increased its capital investment by 9 per cent to £205.1 million.

Chris Loughlin, South West Water chief executive, said: “We’ve talked to thousands of customers and businesses to prepare the best investment plan we can and they have told us consistently they don’t want to see any erosion in services but are worried by rising household bills now and in the future.

“We can help all household and business customers now by not putting a penny on any of our standard water and sewerage tariffs and standing charges until April 2015.”

SWW is due to submit its business plan for the years 2015-2020 on Monday to Ofwat.

“We have re-examined every last detail of our business plan to squeeze out more savings while still delivering the improved services and infrastructure homes and businesses need.”