South Staffordshire Water - now owned by a Middle East bank - has posted better than expected results for the year to March 31.
The group, which supplies water services to 1.2 million customers in the West Midlands, was bought by Bahrain-based First Islamic Investment Bank - now Arcapita Bank - through its subsidiary AquaInvest Acquisitions, for £143 million last November.
Yesterday South Staffordshire said that turnover rose by seven per cent, up from £72.8 million to £77.9 million, while profits before tax and exceptional items climbed 8.6 per cent, from £14.5 million to £15.8 million.
The group added that regulated water supply represented approximately 80 per cent of turnover and pre-exceptional operating profit and performed well.
Operating profit rose by 7.3 per cent to £18 million. Operating profit in non-regulated activities rose by 3.8 per cent to £4.2 million.
Total group operating profit was £ 19 . 5 million and included £2.8 million of exceptional costs associated with the acquisition of the group by Arcapita.
Chairman David Sankey said: "The past year has been a very significant one for South Staffordshire.
"The regulated water business continues to provide high levels of service and efficiency.
"The final determination from Ofwat will keep our charges significantly below the national average, whilst enabling us to maintain our high levels of service and quality to our customers. In addition there are a number of exciting opportunities to grow our non-regulated businesses."
Of the 22 water companies in England and Wales, South Staffordshire Water had the second lowest average annual household water supply bill - excluding sewage chargers - for the year of £92, 21 per cent below the national average.
Ofwat's final determination on water charges for the five years to 2010 allows the company to increase its charges for water supply by an average of 3.2 per cent per annum - less than £3 per household per year.
"The determination has given certainty for the next five years and enables the company to invest to maintain the existing high quality and service standards, whilst keeping charges to the customer amongst the lowest in the industry," Mr Sankey added.
"The group's strategy is to continue to operate the regulated water business as efficiently as possible and to achieve stable profit growth whilst maintaining its high service standards and low charges.
"In addition, the group intends to grow its profitable and cash generative non-regulated businesses."