Severn Trent rejects claims that it has been profiteering

The firm's turnover meanwhile hit �2.29bn, a rise of 14% on last year.

The Birmingham-based firm upped its prices by 15% during the past year, but denied claims that it was profiteering at its customers' expense.

A five-year regulatory deal has allowed water firms the right to lift prices in exchange for infrastructure investment.

Weather

The firm said it had invested �400m in the past year in its assets - such as pipes, and reservoirs - of which �95m went towards infrastructure renewals.

However, leakages rose by 3% - about 17 million litres - from the previous year, with Severn Trent saying weather conditions had made it a "challenging" year.

"A dry summer, followed by a winter with short but severe cold periods creating ground movement, has driven higher volumes of bursts over the winter," the firm said.

Britain's Consumer Council for Water said complaints against the firm had increased by about 55% in the past year.

Announcing its results, Severn Trent also said that it would demerge its Biffa waste management business by the end of October.

It also said that its environmental testing firm US Laboratories was no longer seen as a "core business for the future".

As a result, it may seek to offload the business when its performance shows signs of improving.

Investigation

In April, Severn Trent said it had provided industry regulator Ofwat false information, by misreporting statistics about the way it handled complaints from customers and enquiries about bills.

Severn Trent has already been punished for reporting false data to Ofwat about its income and bad debts.

The company said it did not know how much money was at stake but admitted the problems seemed to stretch back several years.

In June, Ofwat will publish a final report based on findings from independent accountants.