Severn Trent’s Pretax Profit Rises 10% After Dry Summer

Nov. 25 (Bloomberg) — 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.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Randall Hackley at
rhackley@bloomberg.net;
Reed Landberg at
landberg@bloomberg.net
Tony Barrett

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