Severn Trent lifts pre-tax profit, dividend

Utilities giant Severn Trent revealed increased pre-tax profit for the full financial year, lifted its dividend by over eight per cent and said it remains committed to its dividend growth policy until March 2015.

The group, which rejected a bid approach earlier this month from a consortium of foreign investors, said turnover increased 3.4% to £1.83bn for the year to March 31st 2013, in line with expectations.

There was no update on the potential bid approach in today's company statement.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Severn Trent, which supplies drinking water to more than 7m households in Britain, said underlying pre-tax profit slipped 1.2% to £498.0m during the period following costs related to increased investment in its networks and customer service in its water division.

Otherwise pre-tax profit increased 37.3% to £215.2m while basic earnings per share jumped 32% to 95.7p per share.

Looking ahead the group said: "For the remainder of AMP5 we maintain our plans to deliver efficiencies on operational expenditure, continue to improve customer service levels and continue re-investing the efficiencies in our capital programme."

"The group maintains a strong, flexible and sustainable balance sheet, the structure of which is kept under regular review. We are committed to our dividend policy of growth of RPI+3% until March 2015," it added.

Severn Trent said it is well prepared for next price review.

Its full year dividend has been increased by 8.2% to 75.85p per share while its full year dividend for 2013/14 has been set at 80.40p, up 6% in line with current growth policy.

CJ