'Marginal impact' on water profit

SWW's total revenues rose to �431.7m

The company which owns South West Water (SWW) says the economic downturn has only had a "marginal impact" on it.

The Pennon Group said SWW saw an underlying operating profit rise of 3.6%, to £191.6m in the year to the end of March.

The group said that customers switching to meters and lower demand had been offset by some price increases and new connections.

Pennon added that 66% of SWW's domestic customers were now on water meters.

Environment costs

Pennon said that total revenues rose by 2.5% to £431.7m.

The company said: "The direct impact of the current economic slowdown has been marginal to date."

SWW customers have the highest charges in the UK, a situation that the Consumer Council for Water said at the announcement of Pennon's profits was "not necessarily fair".

The council said: "In general, over the last few years, SWW customers have paid on average a lot more than anybody else to pay for the environment in that area."

It said the water company was responsible for cleaning up around 30% of the country's coastline under the terms of its remit, without a high population to pay for it.

The firm said its business plan for 2010 to 2015, which it submitted to Ofwat in April, was "mindful of the impact of further investment in our assets has on the level of customers' bill when customers are least able to afford higher charges".

A spokeswoman from Ofwat said the final pricing decision would be published in November.