The boss of major Perthshire employer Castle Water says the spike in energy costs gave his business more of a headache than the Covid-19 lockdowns.
The Blairgowrie business provides water and wastewater services to companies, charities and public bodies in Scotland and England.
Chief executive John Reynolds said the rise in energy bills – brought on by the conflict in Ukraine at the beginning of last year – caused the firm serious headaches.
He said: “The cost-of-living crisis and the energy price rises were really difficult for us.
“We supply water to business customers in the public sector – a lot of water use in businesses is in applications that use heat, and that uses energy.
“The increase in the cost of energy had a significant impact in reducing water consumption across businesses.
“But it was very difficult for us to predict where this would happen. It was also very complicated for us to deal with.
“We ended up with a lot of work on ensuring our billing was accurate and understanding which customers were changing their level of water consumption.
“It had less of an impact but in some ways was more complicated for us to deal with than the Covid lockdowns.”
Accounts show revenue up for Castle Water
Accounts for the firm show turnover rose to £436 million for the year to March 2023, up from £395.6m in 2022.
The business recorded a £8.6m pre-tax loss, compared to £8.8m losses the previous year.
Given the challenges faced over the financial period, Mr Reynolds said he was pleased with the firm’s results.
He highlighted a growth in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
“We’re very pleased with our performance,” he said.
“Our underlying EBITDA has more than doubled and our balance sheet is significantly stronger.
“It shows us having successfully moved through the cost-of-living crisis and the business performing well.”
Recruitment challenges for Castle Water
Mr Reynolds said Castle Water has had some issues around recruitment. The accounts show a slight drop in the number of staff employed in the business – from 447 in 2022 to 421.
He added: “Recruitment in some areas has been sticky. We have had more vacancies during the year than we wanted.
“Certainly over the past three or four months, it has picked up again.”
Mr Reynolds also praised the current staff for their efforts during another challenging period.
He said: “Everyone has dealt with challenges. It’s been a lot of hard work, but we’ve come through it very well.
“One of the reasons we’re so successful is we’ve got a good group of dedicated, very bright people working with us, and that helps to take the business forward.
“The effort everyone has put in is immense.”
Looking ahead, Mr Reynolds is optimistic the current financial year will bring more positive results for the Perthshire firm.
“We’re expecting another significant increase in revenue and profitability,” he said.
“We can grow the business very substantially from where it is at the moment.”
Conversation