British utility Northumbrian Water today reassured its customers that it saw no need to impose hosepipe bans over the coming summer months as it reported a more than one-third spurt in annual profits to £130.3 million before tax.

The group followed peers including Anglian Water Group and Severn Trent into sharply higher full-year profits, in part due to operational improvements but also thanks to price hikes sanctioned by the regulator, Ofwat.

John Cuthbert, the managing director, said Northumbrian was working hard to meet "tough and challenging" efficiency targets set by Ofwat for over the next five years.

Mr Cuthbert said leakage targets of 157.5 megalitres a day in the north and 69 megalitres a day in the north, agreed with the regulator for this year, had been met.

And he said the group would concentrate this year on delivering further efficiencies, against a backdrop of rising costs, particularly as a result of higher energy prices.

"We have maintained a high level of operational performance, meeting our regulatory targets and delivering high levels of water quality, customer service and environmental standards," he said.

Northumbrian provides water services to more than 4 million customers, mainly in the north-east of England. It also operates in some areas in the south, including in Essex.

Sustained dry weather and heavy leakage problems have forced some utilities in the south, including Thames Water, to introduce restrictions for customers.

But as it predicted no immediate need to introduce bans for any of its customers nationwide, Northumbrian said: "The situation in Essex is currently less challenging than that facing water companies further south and NWL continues to ensure that there is enough water available for customers' needs."

The group added that it would continue to monitor the situation.

Shares in Northumbrian picked up 4p to 243.5p as Northumbrian said it was on course to complete a £1 billion investment programme by 2010.

For full details on the shares click here

Revenues rose by 9.2 per cent to 591.5p and the dividend was set 5.6 per cent higher at 10.56p.

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