South Staffs plans joint venture for customer billing

South Staffordshire, the biggest water-only company in Britain, is expected to unveil a joint venture today with one of the big 10 water and sewage companies to develop a new regional call centre and billing operation.

South Staffordshire, the biggest water-only company in Britain, is expected to unveil a joint venture today with one of the big 10 water and sewage companies to develop a new regional call centre and billing operation.

The move represents an important expansion of the group's non-regulated activities, which now generate more turnover and profits than its water supply business. In recognition of this, South Staffs is moving its Stock Exchange listing from the water sector to the more highly rated support services sector later this month.

South Staffs already supplies its own patented billing system to a number of other water companies including South West Water, which is owned by Pennon, and Wessex.

Announcing increased interim profits last week, South Staffs' chief executive, Brian Whitty, signalled the group's intention of expanding its regional presence by taking on billing and customer support services for other water suppliers and companies outside the industry.

Echo, its own billing division, already handles billing for some of Severn Trent's customers and also for Britannic Assurance, which has its headquarters in the West Midlands.

The deal to be announced today is one of several regional joint ventures South Staffs hopes to forge. It is not expected to lead to any job losses.

South Staffs' biggest non-regulated business is Home Service, which provides emergency plumbing and electrical services to customers of other water companies. It now has 1.65 million policyholders and turnover in the six months to the end of September rose by 30 per cent to £22.5m.

Profits from support services increased by 15 per cent to £8.1m while profits from regulated water supply rose by 5 per cent to £8m. South Staffs also said it could afford to raise £50m in debt to fund further expansion of its non-regulated operations and hinted at a possible rights issue next year.