Mid Kent Water profits beat drought and hosepipe ban

Click to follow
The Independent Online

Mid Kent Water posted a strong increase in first-half profits yesterday despite imposing a hosepipe ban and severe water restrictions on its customers during the summer drought.

The company, which is in the midst of a planned merger with its near neighbour South East Water, said pre-tax profits rose 14 per cent to £5.5m for the six months to the end of September.

The profit rise came despite a slowdown in water usage among its heavily- metered domestic customers as the drought restrictions bit. The resulting fall in turnover was more than offset by price rises allowed by the regulator.

Mid Kent is owned by the Australian fund manager Hastings, which agreed last month to buy South East Water for £665m from its fellow Australian bank Macquarie. This resulted in an automatic merger reference to the Competition Commission which is expected to take six months.

Most of the senior management of Mid Kent have already resigned to take up positions with South East Water, the bigger of the two companies.

If the deal is allowed to proceed it could lead to a rush of mergers among the smaller water-only companies. Ofwat has said, however, that it remains opposed to any mergers between the ten big water and sewage companies.

Two of them - Thames and AWG, the owner of Anglian - are being bought by overseas investors. Thames was bought by Macquarie, but only after it had disposed of South East Water.

Comments