Severn Trent profits down but no hosepipe ban

Utility provider Severn Trent announced profits were down but announced a special dividend and said it forecast no water restrictions for customers this year.

Profit before tax fell 38% to £156.7m in the year to the end of March, something the firm blamed on operational, infrastructure and employment costs.

It was also hit by losses on "financial instruments" of £67.7m.

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Consumption from metered customers was lower year-on-year knocking £10.5m off turnover.

Total turnover was £1.77bn with earnings per share up 37% to 72.5p.

However, the company pushed its dividend up 7.7% to 70.1p as well as announcing a special dividend worth 63p a share to investors.

That gift to shareholders will cost the firm £150m.

As drought continues in some parts of the UK, Severn Trent said it had reduced leakage by 7% year-on-year to a record low level, and below Ofwat targets.

"Our strong balance sheet and investment grade credit rating enable us to share that benefit with our customers and investors by increasing our investment programme in our water and waste water networks by £150m, to improve further our services to customers, and return an additional £150m to our shareholders," Chief Executive Tony Wray.