PROFITS at Cambridge Water, which also supplies homes and businesses in east Huntingdonshire, have returned to the level of two years ago in spite of the effects of the coldest winter for 30 years. In spite of a significant increase in burst mains resulting from freezing temperatures and deteriorating roads, the company achieved its three-year leakage target, it announced yesterday (Thursday). Water quality was again assessed as 100 per cent by the chief inspector of drinking water, while water service regulator Ofwat ranked Cambridge Water in the top three companies for the quality of its customer service. The companys regulatory report and accounts for the financial year ending March 31, 2010, confirm its financial position to be broadly in line with expectations, having reversed the previous years fall in operating profits. Operating profits rose from the low level of 2009 to £5.2million, a similar level to 2008. The improvement resulted from increased turnover from water supplies and a below-inflation increase in operating costs. Turnover increased by 4.6 per cent, 2.7 per cent due to (below inflation) price increases and 1.9 per cent from increased consumption. Operating costs increased by only 1.6 per cent as the first stage of the companys efficiency programme started to take effect. Managing director Stephen Kay said: Our customers continue to enjoy the best levels of customer service and the highest quality drinking water, while benefitting from the second-lowest household water bills in England and Wales. This is despite the fact that in 2009/10 the company faced some of the toughest challenges in our 157-year history. We have had to withstand the longest recession since 1955, and the coldest winter for more than 30 years, which caused a dramatic increase in the number of leaks. It has been a difficult time, but by adopting a flexible approach to our business practices we have emerged from the recession a stronger, more efficient company. But he warned: As we move forward into the next financial year, times will continue to be challenging for the company. Our price regulator, Ofwat, has imposed significant efficiency targets on our base operating costs, which must reduce by a further 12 per cent by 2015. In addition, the amount allowed in customer prices for returns to lenders and investors was reduced by nearly 20 per cent for the same period.