Higher water monitoring costs is one of the reasons for the increases

Earlier this year, industry regulator Ofwat gave the company permission for a 10% increase in water prices.

The group, which floated on the stock market last year, said the rise had improved its annual results.

But pre-tax profits before exceptionals fell to �56.5m from �80.6m in 10 months to 31 March mainly from higher interest charges after it bought Atlantic Water.

The company provides water and sewerage services in the north-east of England and water services in the south-east under the name of Essex and Suffolk Water.

'Considerable change'

It said increased customer debt and higher water quality were among the reasons for the price rises.

On Wednesday, it reported a rise in turnover to �442.1m compared to �429m a year earlier.

It reported 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 costs before exceptionals were �145.8m up from �144m.

Managing director John Cuthbert said: "I am pleased to report a strong operating performance in what was a year of considerable change."