LONDON (ShareCast) - - PBIT and revenues flat
- In line with full year expectations

Underlying first-half profits were flat at Severn Trent as a robust start by the water business was not enough to compensate for a lower contribution from the services arm.

In the six months to September 30th, underlying profits before tax, interest and exceptional items (PBIT) bubbled up 0.4% to £266.9m on turnover up 0.5% to £922.4m.

Underlying earnings per share (EPS) rose 2% to 46.7p and the board hiked the interim dividend 6% to 32.16p per share.

Deutsche Bank had forecast adjusted profit before tax of £155.8m and adjusted EPS of 50.0p.

Severn Trent Water, which increased capital projects investments 12.5% to £269m, saw revenues rise 1.8% to £774.6m after a dry summer, while underlying PBIT rose 0.6% to £269.5m due to operating costs increasing 3%.

Due to delays in customer projects and deliveries for its products arm, the non-regulated services business saw like-for-like revenues fall 5.9% and underlying PBIT fall 3.7%.

However, the services order book continued to grow, adding 28% to £62m since March, supporting the anticipated rise in future deliveries.

Chief Executive Tony Wray, who is handing the reins to new boss Liv Garfield in the coming spring, pointed to below-inflation rises in customer bills, and £91m of its additional £150m investment programme delivering service improvements for customers.

Wray said the group was close to finalising its business plan for the new regulator-enforced asset management programme (AMP6) after an 18-month discussion with stakeholders.

“Our Business Plan, to be submitted by December 2nd, will reflect our customers' priorities and strike the right balance between affordability, investment to maintain and improve our service and environmental standards, and appropriate returns for shareholders.”


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