24th May 2016 06:24
LONDON (Alliance News) - Severn Trent PLC cut its annual dividend by 5.0% but said Tuesday its reported profit and earnings soared during the past financial year, as it provided guidance for the year ahead.
The UK water and wastewater company said its underlying pretax profit, which excludes certain exceptional items, rose by 4.4% in the financial year to the end of March to GBP313.6 million from GBP300.4 million a year earlier.
Reported pretax profit soared to GBP322.3 million from GBP148.2 million, despite revenue declining 0.8% to GBP1.78 billion from GBP1.80 billion in the previous year.
Underlying basic earnings per share rose 1.4% to 108.7 pence from 107.2p, while reported EPS, like reported pretax profit, soared to 139.8p from 49.9p.
Reported EPS and pretax profit both rose year-on-year thanks to a GBP7.7 million gain on financial instruments compared to a huge GBP133.5 million loss in the previous year, whilst exceptional items also fell. Finance costs declined by a material amount as well.
The dividend for the full year was reduced to 80.66 pence per share, a 5.0% cut from 84.90p the year before but in line with the company's policy. Severn Trent said the dividend for the current fincial year will be 81.5p, higher than the dividend for financial 2016 but still lower than the one paid in financial 2015.
Looking at the current financial year, Severn Trent expects revenue from water and wastewater to be in the range of GBP1.50 billion to GBP1.54 billion, whilst net rewards from outcome delivery incentives, which beat guidance by coming in on Tuesday at GBP23.0 million, is expected to be around GBP15.0 million this year.
Operating costs are also expected to be lower at the water and wastewater businesses, with the company expecting GBP130.0 million to GBP155.0 million of net infrastructure renewals expenditure this year compared to GBP126.0 million in the recently ended year.
Business services is expected to report higher revenue and profit before interest and tax this year.
By Joshua Warner; [email protected]; @JoshAlliance
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