Severn Trent maintained its policy of 3 per cent dividend growth, although pre-tax profit was hit by an £18.9m exceptional charge from increased infrastructure spending and the settlement of previous regulatory issues. There was also a £20m revenue reduction from increased water metering.
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Bad debts increased by £6.6m in the period to £34m, too, reflecting commercial insolvencies and domestic customers defaulting on bills - they now represent 2.3 per cent of revenue. Energy and commodity costs also increased, by £12.5m. Severn Trent had warned of these issues in January's trading update - the charges cancelled out regulator, Ofwat's, 6 per cent allowed price increase.