Severn Trent has emerged from a root-and-branch restructuring of back office operations in good shape, although the resulting exceptional costs helped trim last year's underlying profit by 6.8 per cent to £519m.
The UK water side experienced a marginal rise in turnover to £1.39bn and, although sales prices were cut by 0.7 per cent, this was more than offset by higher consumption levels. Underlying profits here slipped 6.9 per cent to £504m. For, while there was an £8.10m fall in employee expenses, this was offset by higher pension costs and a £9.80m rise in hired and contracted services costs.
Severn Trent Services, which operates the group's overseas activities, saw underlying profits dip 9.5 per cent to £25.7m. Trading in the first half was relatively robust but financing delays resulted in some second-half project delays, notably the Gulf coast deep well drilling moratorium and unrest in the Middle East.
And, while the dividend fell this year - reflecting regulator Ofwat's price regime - the group will increase the payout by 3 per cent plus the Retail Price Index (inflation rate) in the previous November. So the payout for the current year will rise 7.7 per cent to 70.1p.
Subject to revision, HSBC expects pre-tax profit for 2012 of £318m and EPS of 97.1p.
| SEVERN TRENT (SVT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,515p | MARKET VALUE: | £3.6bn | |
| TOUCH: | 1515-1517p | 12-MONTH HIGH: | 1,526p | LOW: 1,126p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 464p | NET DEBT: | £3.87bn | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 1.48 | 326 | 106 | 61.5 |
| 2008 | 1.55 | 192 | 89.3 | 65.6 |
| 2009 | 1.64 | 168 | -24.6 | 67.3 |
| 2010 | 1.70 | 334 | 106 | 72.3 |
| 2011 | 1.71 | 253 | 115 | 65.1 |
| % change | +1 | -24 | +8 | -10 |
Ex-div:01 Jun Payment:29 Jul | ||||
