Severn Trent dampened by wet summer

 
City A.M. Reporter
WATER company Severn Trent yesterday said it was on track to meet full-year earnings targets, after rising prices countered lower usage during a wet summer.

An inflation-linked price hike of 5.2 per cent helped to offset a 2.8 per cent fall in consumer consumption in the six months to the end of September, the utility said. Pre-tax profit rose 1.6 per cent to £157.5m, from revenue up 3.6 per cent.

The firm made good on its pledge to raise its dividend above the rate of inflation, delivering investors an interim payout of 30.34p, or 8.2 per cent higher than a year ago.

“We have delivered again on our commitments to our stakeholders,” said chief executive Tony Wray.

“We are on track with our £150m additional investment programme announced in May, delivering operational improvements in the areas we targeted for this year, improving our service to customers and producing sustainable, progressive returns for shareholders.”

Severn Trent also increased its capital programme 28 per cent to £239.2m in the period, as agreed with regulator Ofwat.

The firm’s new industrial water management joint venture, Severn Trent Costain, has made good progress after winning its first client, it said.

Shares in the FTSE 100 firm closed down 0.1 per cent.