StockMarketWire.com - Northumbrian Water Group plc reported an 8.6% rise in the group's six-month profit on ordinary activities before interest to £151.3m from £139.3m.

Revenue for the six months to September 30 was £369.4m, an increase of 5.2% from £351.2m.

Water and sewerage charges at the group's principal subsidiary, Northumbrian Water Limited, increased in line with the recent price review (final determination) allowance of 5.0% plus the November 2009 RPI rise of 0.3%.

The group said demand at NWL from both domestic and industrial customers had remained steady, with increases in measured water volumes, and income from water and waste water contracts increased by 3.7%.

Operating costs rose by 2.9% to £218.1m, principally reflecting increases in depreciation, rates, hired services and pension costs, partially offset by savings on power.

Net finance costs were up by £9.5m.

Profit on ordinary activities before tax increased to £89.7m from £87.0m.

Basic EPS rose to 16.96p from 12.15p. Adjusted EPS was up 2.9% to 12.50p from 12.15p.

The interim dividend was increased to 4.72p from 4.39p.

CEO Heidi Mottram said, 'The group continues to produce strong financial and operational results providing a platform from which to fulfil its regulatory and contractual obligations over the next five years.

'The next year will be important in providing greater clarity on the future legislative and regulatory framework for the industry, with the review of Ofwat and CC Water by Defra, a proposed White Paper on water and Ofwat's own review of its activities.

'It is important that investor confidence is maintained throughout this period of review and consultation, which should aim to clarify responsibilities, simplify the regulatory framework and achieve benefits for customers.'

The shares were up 1.1p at 333p in early trading.




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