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Severn Trent reveal profits slide
Friday 25th November 2011, 11:00AM GMT.
Water giant Severn Trent today revealed falling profits and increasing customer complaints as it battles to come to terms with the impact of three severe winters.
But it pledged to have more staff on hand this winter to help it cope with any repeat of last year’s Arctic snap which saw thousands of customers suffer burst pipes.
The company – which covers most of Shropshire and Mid Wales – saw pre-tax profits fall by almost 35 per cent despite a 2.1 per cent year-on-year rise in revenue to £886 million.
Complaints against the Coventry-based firm rose by 16 per cent, of which 40 per cent came during last winter’s big freeze.
Leaks, burst water mains and low pressure accounted for the bulk of the complaints.
The latest set of half-year figures from the group, which serves eight million customers, has seen underlying profits slip 1.9 per cent to £155 million in the six months to the end of September.
The tumbling pre-tax profits were brought about by exceptional expenses involved in coping with three years of harsh winters meaning losses increased significantly.
Without the extra expense caused by the cold weather profits were largely flat at £155 million, compared to £168 million last year.
Operating costs rose to £19.5 million from £6.2 million Chief executive Tony Wray said: “We have delivered a solid set of results for the half year. Group revenue was up two per cent
“We remain focused on improving the services from our networks.
“We have increased our network replacement activity underpinning our plans to improve network serviceability, supply availability and unplanned interruptions. We are maintaining our leakage activity levels following the severity of the last three winters.
“The transfer of private drains and sewers has gone smoothly and we will provide an overview of expenditure levels at our year end.”
At its core water and sewerage business, ST said turnover was up 4.7 per cent to £735m – 4.7 per cent is also the price increase the company has been allowed to apply to customers.
Customers used about the same amount of water as last year.
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