WATER group AWG has plunged into the red, but said it had clinched a record level of orders in its support services division.

The group, which owns Hartlepool Water, was hit by a £99.3m charge covering write-downs and revaluations of the Morrison construction firm it bought two years ago.

It had to write-down £60m in the value of Morrison.

Pre-tax losses were £53.5m in the 12 months to March 31, compared with pre-tax profits of £125.6m the year before.

But chief executive Chris Mellor said the group, formerly known as Anglian Water, had made "encouraging progress" across its businesses.

He said that forward orders at the group's five non-regulated divisions were at an all-time high of £2.8bn.

The group's facilities management arm had won £604m of work including a waste water deal with the North of Scotland Water Authority and its Utility Services division had renegotiated three deals with gas pipeline giant Transco, netting £180m.

AWG plans to ring-fence its regulated water arm and focus on its support services operations through complex restructuring, returning a possible £600m to shareholders after raising £1.5bn of debt on the bond market.

Mr Mellor said the restructuring would leave the support services business with few borrowings and in a position to "realise their full potential".

Group turnover in the year rose 41 per cent to £1.81bn reflecting the consolidation of Morrison into the figures. Operating profits rose from £283.4m to £305.4m.

Mr Mellor said the group's core water operations had also fared well in the year, with price increases generating a four per cent rise in turnover to £724.4m.