Rise in profits for water company

The rise in bills was almost double the average for the country

South West Water (SWW) has announced a big rise in its profits.

The news is likely to upset many of its 1.6m customers who currently have the largest water bills in the country and are facing a rise in the coming year.

The Pennon Group, which owns SWW, made £131m in the last financial year - a rise in profits of more than 18%.

The company's increased share price has led to takeover speculation, but it said the board was not aware of any particular reason for the rise.

Operating profits for SWW lifted by 10.8% to £156.8m, while revenues rose by £33m to £381.5m, helped by price rises permitted in the current agreement with regulator Ofwat.

In February it was announced average water and sewerage bills in the South West would rise by 16.1% for 2007 to 2008 for an unmetered property and 12.5% for a metered household.

SWW's beach improving Clean Sweep programme has cost £1.5bn

The average increase in England and Wales was 7%.

In Devon, Cornwall and parts of Somerset and Dorset the hike means average customers paying annual charges of between £378 and £650.

SWW said its increases were necessary to help pay for operation Clean Sweep to improve water quality around the region's coastline.

The company said it continued to meet Ofwat's targets for leakage rates, with this year's level being the lowest level recorded.