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.

MoneyWeek

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

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

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

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.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.