Severn Trent has trading update

Tuesday 26th January 2010, 10:28AM GMT.

Recession-hit businesses cutting their water use amid the downturn will now cost Severn Trent around £10 million, instead of the £20 million predicted last year.

But there was also bad news for the water giant, which said a spate of burst pipes after the UK’s big freeze had sent leakage rates soaring.

In a trading update today, Severn Trent said the decline in water consumption in factories and businesses had not been as severe as initially thought but said it was too soon to say what the financial impact of the water leakage will be on its financial performance.

Severn said it had drafted in additional resources to bring leakages back under control “as rapidly as possible”.

The company usually handles around 1,600 calls a day over burst pipes in January, but took double the amount this year.

The company serves a population of more than eight million people from the Bristol Channel to the Humber and from mid-Wales to the East Midlands.

In its trading update for the October to January period, Severn said it had seen signs of stabilisation in bad debt levels, as well as the fall-off in water usage by recession-hit businesses.

Year-on-year declines in business usage are now expected to cost up to £10 million in revenues instead of the £15 million to £20 million it first feared.

View more: Severn Trent news.