Cambridge Water delivers strong performance


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Cambridge Water today reported another successful year to the industry regulator.

In its annual report to the Water Industry Regulation Authority, Ofwat, Cambridge Water reported that it had hit important targets for quality and service while maintaining sustainable levels of returns to investors.

Despite another severe winter the Company achieved its leakage target through careful planning and additional investment in manpower to find and repair leaks.   Other significant investments in the network included the replacement of 10km of water mains and works to ensure that for the first time no customers are at risk of receiving poor pressure during periods of normal demand.   Water quality compliance was again rated as 100%.   The average water bill to household customers was once again the second lowest in England and Wales.

Current cost operating profit after tax, the measure used by Ofwat to control prices, increased by £158k to £4.291 million [3.8%] compared with 2009/10 as a result of higher turnover and lower operating costs.  

Turnover increased by £93k [0.5%] despite price reductions to customers.   The extra revenue was a result of additional summer demand and new household and commercial customers.   The Company also benefitted by £500k from property sales. Operating costs were £786k [6.7%] lower despite the additional money spent on controlling leakage from December to March and an 11% increase in the total of fees paid to the Environment Agency and Business Rates.   Abstraction charges and business rates now account for 16% of operating expenditure.   The positive effects were balanced by an increase in current taxation of £1.241 million.

Net investment in infrastructure was equivalent to 2009/10 at £2.592 million but will more than double in the current year as the Company commences work on the installation of equipment to control increasing levels of nitrate in its boreholes.

Commenting on the report, Managing Director, Stephen Kay, highlighted the work of the Company’s staff in continuing to provide industry-leading levels of quality and service at prices less than all but one other supplier.   “The response of our staff to maintaining supplies to customers during the severe winter weather was outstanding.   Activity on all aspects of our operations continued without a break over the Christmas and New Year holidays which ensured that we met our regulatory targets and our customers’ expectations of a consistent high quality supply.”  

Looking forward, Mr. Kay is concerned about the effect of increases in costs of energy and government controlled fees and taxes.   He stressed the challenge of continuing to meet more stringent quality and service obligations while maintaining prices in line with the rate of inflation.   

A copy of our regulatory reports are available here.

10 June 2011

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