Business Weekly - Cambridge, UK

AWG shares rose 3.5 per cent after substantially increased operating profits for the year ended March 31, even though results across the group were mixed and pre-tax profit was hit by exceptional costs of £144.2m.

Turnover was up to £1.759 bn from £1.74 bn last year. AWG’s operating profit before exceptional items and goodwill amortisation rose 4.8 per cent from £325.9m to £341.6m. The bulk of the £144.2m exceptional costs were as a result of the disposals and closures of the international businesses.

AWG’s group chief executive, Jonson Cox said: “Anglian Water delivered a good operating performance and submitted its final regulatory business plan, which proposes lower capital expenditure and the lowest bill increases of any major water company.”

But he conceded that the operating results of the contracting businesses in the Infrastructure Management Business were “disappointing.”

Cox said a review of the group’s businesses had “underlined the pivotal role of Anglian Water in the group and its key role in delivering consistent returns for equity investors.

“We see Anglian Water at the heart of the group’s strategy, while ensuring that our other businesses contribute to our earnings and cash flow.”

Anglian Water’s good performance was enhanced by additional revenues from metered customers during the exceptionally hot, dry summer. AW contributed £318.9m operating profit in the year (2003: £287.4m before exceptional items of £18.0 million).

Construction Services reported an operating loss before exceptional items and goodwill amortisation of £7.1m (£0.6 million), reflecting additional costs to complete a number of large contracts.

Cox said the board would continue to strengthen the management team and improve the operating performance in the IMB business.