NORTHUMBRIAN Water last night pledged to forge ahead with capital investment programmes in the North-East after its first stock exchange annual results.

The utility company has benefited from agreed price rises by the industry regulator Ofwat that will help bring the supply and sewerage systems up to date.

The company told the City that the extra revenue had helped to significantly strengthen its financial position.

A ten per cent rise in water prices improved its results, which were also buoyed by a decision by the European Investment Bank to maintain funding.

Pre-tax profits before exceptionals fell to £56.5m from £80.6m in the ten months to March 31, mainly because of higher interest charges following the £1.01bn deal to acquire Atlantic Water in May last year.

Northumbrian provides water and sewerage services in the North-East under its own name, and water services in the South-East through its Essex and Suffolk Water brand. The group, which floated on the stock market last year after an eight-year absence, reported a rise in turnover to £442.1m from £429m a year earlier.

Its finances were also boosted by £212m raised from a long-term securitisation agreement relating to its contract with the Environment Agency to operate the Kielder Water transfer scheme in Northumberland.

Group operating profits before exceptionals were £145.8m.

This included a £10.8m increase in operating costs at its UK water operation, due to factors including higher manpower and sludge treatment costs.

John Cuthbert, managing director, said: "We are looking for more of the same, more investment in the region. We have a commitment to ensure we continue to deliver the high standards of service we have delivered in the past."

Pre-tax profits after exceptional items were £45.5m. A total dividend of 6.95p was recommended.