Profits surge at Sutton & East Surrey Water

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The Independent Online

Sutton & East Surrey Water, owned by German bank Deutsche Bank, reported a 21 per cent rise in profits before tax over the past year despite the drought in the South-east of England where it operates.

Despite the profit increase, the water company has still issued a drought order as a result of "one of the severest droughts in the company's history".

Unlike its rival Thames Water, Sutton & East Surrey Water has met all of its water leakage targets and has thus been commended by the regulator Ofwat. However, it has issued a drought order to restrict water for "non-essential purposes". That will affect consumers in the London boroughs of Sutton, Croydon and Merton, as well as east Surrey and parts of Kent and Sussex.

"We remain one of the most successful companies in minimising water loss from the network," the company said. However, it said that after two years of well below average winter rainfall, its bore-holes are at very low levels.

Thames Water, which has been put up for sale by its German owner RWE, faces hefty fines over its water leakage problems. The company blames old pipes in London for leakage deemed unacceptable by the regulator. Consumers have been angered that water restrictions have been put in place while prices have risen substantially, driving Thames Water profits higher.

Sutton & East Surrey recorded a 21 per cent increase in profits before tax to £6.5m while revenue rose 15 per cent to £45.4m. The company was bought by Kellen Acquisitions, a vehicle for venture capitalist Guy Hands, last year as part of the takeover of East Surrey Holdings. The water division was subsequently sold to Deutsche Bank in January.