INCREASING costs stemming from the economic climate and extreme weather this year have contributed to a sharp fall in Jersey Water’s profits, while the firm’s senior executives have seen their earnings rise.
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, but the report also flagged achievements in water quality and customer service.
Chief executive Helier Smith, whose annual bonus of £38,000 was also highlighted in the report, said the company’s operating costs had increased by 12.6%.
He said: “We, like many businesses, have been feeling the ongoing effects of rising costs driven by the economic climate.
“This was due to significant increases in the cost of materials, labour and power, brought about by macroeconomic factors beyond our control, combined with specific costs relating to one-off events.”
Despite a fall in profits, 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 and including a £21,000 bonus.
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 is the company’s majority and controlling shareholder.
Events mentioned in the report included the devastating Grands Vaux flooding in January, which displaced several households and cost the company an estimated £190,000.
Meanwhile, the hot summer of 2022 meant it was necessary to continue operating the desalination plant during the following autumn, adding to costs.
Heather MacCallum, chair of Jersey Water, said 2023 had been “challenging”, but 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.”
A water quality figure of 99.98% put Jersey among the top countries in the world in this respect, the report noted, while 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%.
Responding to a query about the pay rises and bonuses to senior executives in the context of its fall in profits, the company confirmed the issue was determined by its remuneration committee and reflected individuals’ performance.
Committee chair Donna Abel said: “Executive remuneration is externally benchmarked and determined using a wide variety of measures, including Jersey Water’s financial and operational performance, our service to customers and delivery against predetermined strategic objectives.”
