Dee Valley Group's full year profits fall slightly as revenue drops

Dee Valley Group, a water company supplying north east Wales and parts of north west England, reported a slight drop in annual profit compared to the previous year on a fall in revenue.

The company reported profit before tax of £4.2m for the year to 31 March 2016, down from £4.5m the previous year.

Profit from operations fell to £6.6m from £7.5m in 2015 as revenue declined. Revenue for the year was affected by the AMP6 Final Determination, a water project investment in which Ofwat imposed a reduction in prices during its first year, and low consumption from large non-household customers.

The reduction in revenue was partially offset by a £0.7m fall in operating expenses.

Dee Valley, which has the fourth lowest water bills in England and Wales, increased capital investment to £6.2m, with £5.6m of cash spend net of capital accruals. Operating net cashflow decreased to £12m from £13m in 2015 due to lower operating profit.

The company reported a final dividend of 42p per share, bringing the total dividend of 62.5p per share, unchanged from the year and with the base dividend in the AMP6 investment project.

Chief executive Ian Plenderleith said: "In previous years, customer satisfaction with water quality had been a particular challenge for us, however I am pleased to report that we have risen to this challenge with customer contacts for discoloured water reducing by 27% year-on-year.

"We are now well on track to outperform the target set for us by our regulators and meet the standards expected by our customers."

Plenderleith has just completed his first full year ta Dee Valley, after joining the company in August 2014.