Severn Trent seems to have sprung something of a leak - pre-tax profit at the water utility fell sharply in the period as the group's overseas business suffered a £21.9m exceptional charge after being caught up in the Italian debt crisis. Although the underlying group pre-tax profit fell just 2 per cent to £155m.
The core water business saw flat consumer demand and a 4.7 per cent revenue rise to £734.3m, in line with allowed inflationary price increases. Operating costs were also impacted by inflation, which left underlying trading profit flat, although bad debts fell 7.2 per cent to £15.5m. Investment in the pipe and reservoir network reached £197.4m with chief executive Tony Wray confident that the group remains on track for £450m-470m of investment for the full year. The biggest problems were in the services division where revenue fell 7 per cent to £160m - it's also where the group took its debt crisis-related hit, after an Italian associate's efforts to refinance loans hit the buffers.
Investec Securities expects adjusted full-year pre-tax profit of £271.9m, giving EPS of 84.7p.
SEVERN TRENT (SVT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,485p | MARKET VALUE: | £3.5bn | |
| TOUCH: | 1,484-1,486p | 12-MONTH HIGH: | 1,621p | LOW: 1,349p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 404p* | NET DEBT: | 389% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 868 | 101 | 43.9 | 26.0 |
| 2011 | 886 | 65.3 | 30.5 | 28.0 |
| % change | +2 | -35 | -31 | +8 |
Ex-div: 30 Nov Payment: 13 Jan *Includes intangible assets of £193m, or 81p a share | ||||
