Severn Trent sees profits stumble
Water company Severn Trent has seen its profits fall due to higher investment costs and lower gains from property disposals.
The group, which serves millions of customers across the Midlands and Mid Wales, posted a pre-tax profit of £180.7 million for the six months to the end of September, down 11 per cent from £203.6 million the year before.
Severn Trent's profit performance was hit by weaker results from its Regulated Water & Waste Water segment, due mainly to higher costs from infrastructure renewals, as well as lower gains from the sale of properties at £6.2 million, compared to £18.4 million the prior year.
Revenue however, grew by 3.2 per cent year-on-year to £910 million from £881.5 million, which was attributed to tariff increases, including the effect of the retail price index increase on prices.
Looking ahead, Severn Trent said it expects revenue from its Regulated Water & Waste Water division for its current financial year ending March 2020 in the range of £1.61 billion to £1.64 billion, representing a 1.9 per cent to 3.8 per cent increase from £1.58 billion the year before.
Meanwhile, the Business Services segment is set to report an increase in underlying profit before interest and taxes, from £44 million the year before.
Chief executive Liv Garfield, said: "This has been another six month period where we have delivered for all of our stakeholders through strong performance, continued investment and environmental improvement, helping us to fulfil our goal of being the most trusted water company in England.
"Operationally we have made further progress over the last six months, with leakage, supply interruptions and water quality complaints all improving while delivering important environmental improvement schemes.
"We have continued to offer the lowest bills in the country while also investing for the long term.
"At the same time, we have worked hard to be in the best possible shape for the next five years.
"Our job is to deliver for all of our stakeholders as we build a sustainable business that positively contributes to the society and environment we operate in and we are truly excited about delivering on the plans we've set out."