Severn Trent’s Pretax Profit Rises 10% After Dry SummerLouise Downing
Severn Trent Plc, the U.K.’s second-largest publicly traded water company, said fiscal first-half sales rose 2.7 percent due to an increase in prices and low rainfall that led to higher consumption.
Sales advanced to 947.7 million pounds ($1.49 billion) in the six months through September from 922.4 million pounds a year earlier, the Coventry-based company that supplies water to about 7.7 million people said today. Underlying pretax profit rose 10 percent to 155.8 million pounds. The utility increased its interim dividend 5.6 percent to 33.96 pence a share.
“Our average combined bill is the lowest in the land and we are confident of maintaining the lowest bills for the next five years,” Liv Garfield, chief executive officer of the utility, said in a statement.
The company invested 247.9 million pounds in the period to deliver improvements including reductions in leakage, polluting incidents and sewer flooding. It also brought forward 15 million pounds of spending planned for the next five-year period starting 2015 to boost the security and quality of water supplies and to reduce sewer blockages and flooding.
Severn Trent shares slipped 0.3 percent to 20.55 pounds in London trading. They’ve risen almost 21 percent this year.
Britain’s water companies are awaiting a final decision due Dec. 12 on the prices they can charge customers for the five-year period beginning next year. Severn Trent submitted a business plan to the industry regulator Ofwat that proposed limiting household bills to 2020 to an equivalent of 1.2 percent below inflation a year with a price freeze in 2015 and below-inflation rises the remaining four years.
Severn Trent last month named drugmaker Shire Plc’s James Bowling as finance chief to replace Mike McKeon when he retires in the spring. It also said as many as 500 of the company’s 6,000 jobs were being shed after combining sewer and water-supply divisions.
United Utilities Group Plc, the largest publicly traded water company in the U.K., is scheduled to report first-half earnings tomorrow.