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Jersey Water has confirmed a sharp fall in annual profit, citing escalating costs associated with extreme weather and the economy – while also defending pay rises and bonuses for senior executives.
Express took a look at the utility company's annual report and financial statements, which were released today...
In its annual report, the utility company declared a pre-tax profit for the year to September of £1,165,000, compared to the previous year's like-for-like figure of £2,745,000.
Chief Executive Helier Smith – who picked up an annual bonus of £38,000 as part of overall pay package of almost £250,000 – said the company's operating costs had increased by 12.6%, rising by almost £2 million from the 2022 figure of £15.5m.
As a result of the fall in profits, the final dividend to shareholders was cut from approximately 16.5p per share in 2021/22 to 8.5p for the last financial year. The Government of Jersey is the company's majority and controlling shareholder.
Eating into profits were "significant" increases in the cost of materials, labour and power – operational costs which were referenced as Jersey Water confirmed in autumn that an average household should expect to pay around 12p per day higher from 1 January, equating to 10.9% or approximately £45 per year.
The annual report also cited "specific costs relating to one-off events".
Events mentioned in the report included the Grands Vaux flooding in January this year, the response to which had cost the company an estimated £190,000.
Pictured: CEO Helier Smith.
Also referenced was the hot summer of 2022, which meant it was necessary to continue operating the desalination plant during the following autumn. Last year, the company said the desalination plant cost around £8,000 per day to operate.
A water quality figure of 99.98% put Jersey among the top countries in the world in this respect, the report noted.
Meanwhile, a customer satisfaction score of 83.6% was up 0.9% on 2022 and compared with an average UK figure across all sectors of 76.6%.
The company also connected more than 400 new properties to mains water, and improved its rates for detecting and reducing leaks, with properties on average being without water for less than a minute compared to a UK national average of 12 minutes.
While water bills are due to rise next year, 73% of surveyed customers said Jersey Water represents "value for money, despite the rising cost of living".
Heather MacCallum, Chair of Jersey Water, said 2023 had been "challenging".
Pictured: Jersey Water shared its 2023 highlights in the report.
She added: "While the variable weather tried its best to test our operational capabilities, we demonstrated our resilience through another year of strong performance.
"As well as our day-to-day role of supplying water to our customers, we made real progress on key strategic projects, namely updating our plans for managing the Island’s future water resources; designing the expansion of the existing desalination plant; submitting plans for our new headquarters; and advancing our sustainability journey.”
Senior executives all saw their total remuneration rise during the year: Mr Smith was paid a total of £247,000, up from £237,000, including his £38,000 bonus.
Finance director Natalie Passmore received £165,000, up from £159,000 the previous year and including a £21,000 bonus, while operations director Julie Taylor was also paid £165,000, a rise of £13,000, with a £21,000 bonus.
Jersey Water said the pay packages received by senior executives were determined independently by its remuneration committee. Donna Abel, chair of the committee, said: “The level of executive remuneration including variable pay is externally benchmarked and is determined using a wide variety of measures including Jersey Water's financial and operational performance, our service to customers and delivery against predetermined company strategic objectives.
“Executive pay for 2023 has been determined against these criteria, including both performance in a challenging year and the wider economic context, after careful consideration by the remuneration committee, and is reflective of individual performance."
You can read the full annual report here.
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Pictured - top: Jersey Water spent £190,000 on its response to January's flooding incident at Grands Vaux.
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