Published on 26th November 2014
The latest figures from quoted water utility Severn Trent revealed a company in healthy shape, with pre-tax profits 10% ahead at £155.8m. Critically, it no longer seems to be the case that the company's future dividend growth will be hurt by the looming settlement with its regulator, Ofwat. Indeed, surprisingly the firm believes that it can further slim its workforce without negatively impacting its frontline services. Management has also suggested it can afford to push up water bills by significantly less than inflation over the next regulatory period, spanning the next five years. On top of that, the 5.6% increase in its interim payment was easily covered by earnings.