21st Nov 2019 08:59
(Alliance News) - Severn Trent PLC upped its interim dividend on Thursday, even as profit dropped on higher investment costs and lower gains from property disposals.
For the six months to the end of September, the FTSE 100 water utility firm posted a reported pretax profit of GBP180.7 million, down 11% from GBP203.6 million the year before. Profit before interest, taxes and exceptional items was also down, falling by 4.3% to GBP285.3 million from GBP299.1 million.
Severn Trent's profit performance was hit by weaker results from its Regulated Water & Waste Water segment, due mainly to higher costs from infrastructure renewals, as well as lower gains from the sale of properties at GBP6.2 million, compared to GBP18.4 million the prior year.
Revenue however, grew by 3.2% year-on-year to GBP910.0 million from GBP881.5 million, which was attributed to tariff increases, including the effect of the retail price index increase on prices.
Severn Trent declared a dividend of 40.03 pence, up 7.2% from 37.35p the year before.
Looking ahead, Severn Trent said it expects revenue from its Regulated Water & Waste Water division for its current financial year ending March 2020 in the range of GBP1.61 billion to GBP1.64 billion, representing a 1.9% to 3.8% increase from GBP1.58 billion the year before.
Meanwhile, the Business Services segment is set to report an increase in underlying profit before interest and taxes, from GBP44 million the year before.
The group anticipates declaring an annual dividend of 100.08 pence per share, a 7.2% increase from 93.37p.
"This has been another six month period where we have delivered for all of our stakeholders through strong performance, continued investment and environmental improvement, helping us to fulfil our goal of being the most trusted water company in England. Operationally we have made further progress over the last six months, with leakage, supply interruptions and water quality complaints all improving while delivering important environmental improvement schemes," said Chief Executive Liv Garfield.
Shares in Severn Trent - which is headquartered in Coventry - were down 2.4% at 2,282.00 pence on Thursday in London.
By Dayo Laniyan; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Severn Trent