14th Feb 2014 07:50
LONDON (Alliance News) - Severn Trent PLC Friday said trading from October 1, 2013 to date remained in line with expectations, while operating expenditure continues to be in line with expectations for the year.
In an interim management statement for the period to Thursday, the utility firm said operating costs are expected to rise year on year due to the impact of inflation and power costs, partially offset by efficiency improvements.
The utility said the current flooding in the UK is not expected to have a financial impact on the company.
Coventry-headquartered Severn Trent said net capital expenditure is expected to be towards the low end of the GBP600 million to GBP620 million range, including an estimated GBP15 million related to private drains and sewers.
The level of net infrastructure renewals expenditure included in this range is anticipated to be GBP135 million to GBP145 million.
Severn Trent also said consumption across its measured income base is expected to be slightly higher year on year, given current volumes.
The water firm remained upbeat about its bad debt level - the failure of some customers to pay their water bills.
"Our forecasted bad debt level is maintained at around 2.2% of revenue for the full year, and we continue to monitor developments such as unemployment levels and changes to the UK benefits system closely," it said.
For the non-regulated business, Severn Trent said operating services continue to perform well year on year, but product shipments have been below expectations in the last two months due to continuing customer project and delivery delays.
As a result, full year underlying pretax profit at Severn Trent Services is now expected to be lower year on year, it said.
Severn Trent Services supplies water and wastewater treatment solutions.
The company said expects to announce a 6% increase in dividend to 80.40 pence when its publishes its preliminary results for the year ending March 31 on May 29.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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