South West Water (SWW) has reported a bumper surge in full-year profits, helped by rising water rates.

The Exeter-based firm saw operating profits jump 10.8 per cent to £156.8m in the 12 months to April 30.

Full-year revenues rose by £33m to £381.5m.

However, the bumper results are unlikely to please the firm's 1.6 million customers who have complained strongly against the high level of water bills.

And SWW's bills, which are already the highest in the country, have got even higher.

In February, SWW announced that metered customers will see an average increase of around 12.5 per cent and unmeasured customers, an average increase of 16.1 per cent in their charges for 2007/08.

The charges were approved by regulator Ofwat.

According to the BBC, the average increase in England and Wales for 2007/08 was 7 per cent.

The sharp rise in water rates means customers in the South Hams are paying annual charges of between £378 and £650.

SWW: "Historically, customers in the South West have faced higher than average bills because of the region's relatively small population and the cost of maintaining water infrastructure spread over a very wide area."

SWW blames the high rates on the increasing cost of keeping the coastal region's sea water clean.

"Historically, customers in the South West have faced higher than average bills because of the region's relatively small population and the cost of maintaining water infrastructure spread over a very wide area," SWW said in a statement.

"We have also invested heavily in modernising the region's water and sewerage services following a century of little or no investment prior to privatisation.

"The £2bn we have invested since 1989 is delivering real and beneficial results for customers, the South West and the South West's economy.

"We now have the cleanest rivers in the country, some of the cleanest bathing waters in Europe, we are hitting new highs in the quality of drinking water with 99.96 per cent compliance and becoming one of the best at preventing leaks."

Pennon Group, SWW's parent company, made £131m in the last financial year, up 14.2 per cent on a year earlier.

The group also owns Viridor Waste, whose annual profits rose 30.4 per cent to £46.8m.

Pennon Group chairman Ken Harvey said: "I am delighted to report an excellent year for Pennon.

"These results demonstrate further profitable growth in the group and affirm our strategy of focusing on our two key businesses, South West Water and Viridor.

"South West Water remains on target to meet the current regulatory contract and Viridor has had an outstanding year delivering a particularly strong performance based on both organic growth and successful acquisitions as a result of its focused strategy."