WATER company Kelda has played down speculation it was set to announce fresh restructuring proposals as it reported a 13 per cent jump in first-half profits.

The firm behind Yorkshire Water said it was keeping "all options under review" but said more time was needed to study which models work best.

Kelda had an innovative attempt to turn itself into a mutual society last year thrown out by the then Ofwat regulator Sir Ian Byatt.

However, new regulator Philip Fletcher has since approved the acquisition of Welsh Water by Glas Cymru, a vehicle funded solely by bondholders.

Recently, both Southern Water and Anglian Water announced plans to refinance their regulated water arms.

Kelda chairman John Napier said he did not believe such refinancing moves provided "a long-term solution" to the restrictions placed on a listed firm.

"Therefore, at this time we continue to keep all options under review as well as developing further initiatives of our own," he said.

Mr Napier's comments came as the Bradford business posted half-year figures ahead of City expectations.

Pre-tax profits across the group rose to £91.4m in the six months to September 30, compared with £81m in the same period last year.

Turnover from continuing operations rose five per cent to £329.8m.

Mr Napier said Kelda's results had been boosted by an increasing contribution from its stake in waste management group Waste Recycling.

However, he added that Yorkshire Water, which provides water to 4.5 million homes, had seen its income rise while regulated operating costs came down by one per cent.

Turnover at Yorkshire Water rose three per cent to £282.5m, reflecting the rise allowed in water tariffs, and operating profits climbed six per cent to £119.3m.

Kelda said the water business had continued to improve "its quality, service and efficiency" and was well placed to achieve Ofwat's cost reductions.

Drinking water compliance levels were at record highs while there had been a "dramatic improvement" in the quality of the region's heavily polluted rivers.

Turnover at Kelda's US water supply business Aquarion increased ten per cent to £42.5m. Operating profits rose eight per cent to £17m.

Shareholders will receive an interim dividend of 7.7p per share, up 2.7 per cent.