Severn Trent makes £188m profit
Tuesday 24th November 2009, 10:11AM GMT.
Water giant Severn Trent, which serves Shropshire and Mid Wales, today announced a 22 per cent hike in profits to £188 million for the first half of the year.
The utility company said cutting costs and keeping a tight rein on customers owing cash had helped the firm.
Severn Trent saw an £8.8 million fall in revenues from its metered customers on a year earlier, but the group added that this trend was beginning to stabilise.
It added that households and businesses were still being hit by the recession, which was impacting on the amount of water being used.
Turnover from the water business overall was up four per cent at £695.3 million due to price increases from last April.
The group has also improved its debt collection performance amid rising numbers of struggling customers, which is helping offset the fall in water usage.
Chairman Sir John Egan said the group had “remained focused on delivering further improvements in efficiency, processes and standards, as well as successfully managing impacts from the economic environment, such as bad debts and consumption level”.
The biggest challenge ahead for the firm – and the entire water industry – is the final decision on prices for the 2010-15 period due from water regulator Ofwat on Thursday.
Severn put in for price increases but has been asked by the regulator to cut household bills by eight per cent in real terms over the five-year period.
The group said that it had “fully engaged” with Ofwat over the review of prices, although full-year results would also depend on getting an “acceptable” settlement.
The new price limits will come into effect on April 1, 2010.
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my quarterly water bill for last quarter year was £110.
compared to electricity at £90.
& gas for 6 months was £35 (summer).
thats quit a lot for water for a single guy,who’s main water is used for flushing the toilet.
2 kettles filled per day at 1.5 litres.(1 for a wash in the morning,1 for washing up).
& making about 10 pints of squash drink a day from the tap.
& a 10 minute shower every other day.
i have a lot of appliances running in my 2 bed house,yet my electricity is charged at a lower rate.
i think its time severn trent lowered a few prices.
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Don’t hold your breath, Bob (#2). With electricity and gas, you can look for an alternative supplier, but Severn Trent is a straight-forward monopoly so there will be no let-up in the pain for consumer.
No doubt their top people will get a good bonus for this result – making increased profit by charging people who have no option but to buy from them.
And don’t look to the government for help, such as appointing a stronger-minded regulator than the current one – it’s not in their interest. The higher the price, the more VAT they can rake in and the higher ST’s profit, the more Corporation Tax they can rake in as well.
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Ah – at last some good news – in the current economic climate it’s reassuring to see a business doing well – just shows that if you work hard you’ll be rewarded! Well done ;-)
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Bob, comparing your ST bill (which I suspect is not based on usage but your old rateable value) to your very low ACTUAL usage for electric and gas is misleading. Most average families will tell you their annual spend for electric and gas averages around the £1000 mark – way above their water (and sewerage don’t forget) bill.
Therefore, rather than moan about reducing prices (which frankly won’t happen), do something practical about it yourself and install a water meter. If you already have one, I suspect you may have a leak.
PS, would hate to think how much money you spend on squash!!!
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Bob, I suspect your bill is based on the rateable value of your property NOT your actual usage. If you are on a meter, you may have a leak.
Also, comparing the charges to your very low annual electric and gas usage is probably a little unfair. I would have thought that most families average annual gas and electric charges are around the £1000 mark!
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James Fail,
I was v. interested in your comment – I’ve been looking into my Mum’s water bill as she currently repays a lot higher per month than anyone else I know families included and she lives on her own. Her bill seems to be based on a rateable value too – what does this mean and can I get it changed? Any advice you can offer will be gratefully received
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Frank/James, it would appear that you work for the great organisation itself, so perhaps you can explain why as a single person ON A METER, my half annual bill is £162, risen from £86 when first installed about 5 years ago.
NO, I don’t have a leak because even a drip on a tap shows up on the meter and mine doeasn’t move when nothing is running. I would call them out to test it but they would probably charge methe equivalent of 6 months water bill, just to check it and tell me it is OK.
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If you’d like I can make you all feel a little better about your utility bills.
Living in Phoenix, Arizona my average MONTHLY water bill is around £100 and electricity bill around £400.
The upside being it is 80 degrees today with beautiful blue skies.
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Hi Suellan, on ‘unmetered’ bills, water and sewerage charges will be set the same for everyone (if you’re connected to the mains for both). Basically they’re multiplied by the rateable value to arrive at your charges. Therefore, the higher your rateable value the more you’ll pay. Some would say it’s an out-of-date system of charging which benefits some (i.e. a large family living in a small-medium sized house) and not others (as in the case of your mother). I would give them a call and ask for a meter application pack. Sorry I don’t know the number.
Brian2 – why do you think your bill has increased? Could it be that (like all other utilities and council tax for the last god- knows-how-many years) your charges have gone up? Have a look at your usage, do some research instead of jumping to conclusions and moaning. While you’re at it, why don’t you just ring them up and ask whether you would be charged for checking your meter? £162 x 2 = £324 per annum = 88p a day. Still not bad for providing you with potable water and taking away/treating all your dirty waste aswell!
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Thanks James – just got the number online and spoken to Severn Trent and they agree – they just me told the rateable values are set by the government or council or something and that they can’t influence them. Also said they haven’t been updated since 1980′s! They think a meter would suit Mum better too and sending the details.
Thank you for the advice
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to “Frank Zappa”
who said i was’nt already on a water metre?,
why else would i compare all 3 utilities.
money on squash £1 per week at 3 litres a bottle as your so interrested.
how much do you spend on milk/tea/sugar/coffee?,maybe we should compare teeth & dental bills.
you obviously cant tell the difference between moaning & stating a personal fact.
maybe if you wasn’t wasting so much money on energy your water bill would’nt look so cheap.
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James, well done you are obviously very bright to assertain that my charges have gone up, drastically as it happens, and being as Severn Trent are a monopoly, we can’t do much about it but moan. I’m sorry if you at severn trent don’t like us mere customers moaning at your over inflated profits that go to pay large dividends to your shareholders.
I have looked at my usage and I certainly don’t use any more water than I did when installing a meter 5 or six yers ago but like others that I talk to with meters, it is no longer an economical situation and I would recommend anyone thinking of having one to monitor it carefully over the first year to see if it is worth keeping it on after that.
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James, if you consider that the culminative amount of water, that I draw, averages to less than an hours use per day and the culminative amount of gas and electricity that I draw, amounts to well over 12 hours usage a day, I would say that this is pretty poor value for money don’t you.
My energy bills, per annum, are nowhere near 12 times the amount that I pay for my water.
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Brian2
Your bill is not bad actually in comparison – my mum is a single person living on her own and on rateable value she’s paying £275.00 every 6 months!
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Exactly Suellan, it just goes to show how much most of us are paying for very little.
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What I would like to know is why does a English company make so much money from what is Welsh water.
Should’nt the Welsh tax the English for use of this water?
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Interesting this.
In comparing costs of electricity and gas against water – where is the REAL difference?
All three are privatised industries, yet we only have a choice of supplier for electricity and gas! – Where’s the logic in that?
IF we can have a system where the SAME wires and pipes are used respectively for electricity and gas irrespective of “who supplies it” – then WHY not for water? – So where IS the REAL difference??
Water has to be treated etc etc – but so does electricity and gas !!
The only difference I can see is that electricity and gas have ALWAYS been metered, whereas water traditionally has not been, so it is “easy” to “sell” the product based on “usage alone” from different suppliers EVEN THOUGH it comes through the same delivery medium!
So – Surely the answer to this is to make water TRULY privatised by making it such that:
Those who choose to have water meters fitted can “buy” their water supply from a range of suppliers in the same way as for electricity and gas.
Or – If this ISN’T really an option – then water supply – which is a BASIC requirement for life – should be placed BACK in public hands – and supplied on a not for profit basis.
It’s either good enough for all three products to be sold in the same way “as a privatised industry”, or it isn’t !
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It strange how the pro Severn Trent supporters have gone quiet when faced with rational arguments. Maybe Askeric is right and the water industry should be put back in public ownership or face competition like the other energy suppliers.
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