Interim report reveals group profits down at Severn Trent
Severn Trent Water has revealed turnover was up by 4.7% in the six months to September 30, while group profits fell slightly.
Its interim report shows that the allowed price increase of 4.7% saw turnover rise accordingly to £735m. However, group profit before interest and tax (PBIT) decreased by 5.9% to £254.8m, which Severn Trent says is a result of investment in its network.
In addition, the company's services business was hit hard, with underlying PBIT falling by 50% to £6.5m - a decrease of 7% on the same period last year. According to Severn Trent, this is unlikely to improve before the start of the next financial year.
Commenting on the results, Severn Trent chief executive Tony Wray, said: "We have delivered a solid set of results for the half year. Group revenue was up 2% period on period with underlying group PBIT down slightly, reflecting increased investment in our networks in Severn Trent Water."
In addition, Severn Trent reported that the transfer of private drains and sewers successfully completed on October 1, and said it would be providing an updated view of capital and operating expenditure in May next year.
Mr Wray added: "The transfer of private drains and sewers has gone smoothly and we will provide an overview of activity and expenditure levels at our year end".
Leakage reduction was also shown to be on target, which Severn Trent has attributed to its focus on reducing unplanned interruptions and improving supply availability. These areas were highlighted as requiring improvement in Ofwat's new performance report for 2010 - 2011.