Heavy losses on financial instruments and overseas investments hit Severn Trent's reported results, but a stable performance from the core UK water utility meant underlying pre-tax profits only slipped from £288m to £275m, allowing Severn to announce a 63p special dividend and increase capital investment by £150m.
Severn Trent Water saw a 2 per cent fall in water usage during the 12-month period but still managed to increase revenues by 4.9 per cent to £1.46bn after pushing through a 5.2 per cent regulatory price increase in line with inflation. The water utility spent £474m in capital investments and chief executive Tony Wray said that a further £570m-£590m will be spent in the coming year. Debt collection is still improving, with bad debts 9.8 per cent lower at £30.3m.
The group's reported results were hit by £50.9m in exceptional items including a £12m write-down in the UK Laboratories unit after the loss of two key customers and a further £10.9m impairment charge on the Italian and Spanish businesses reflecting the cautious backdrop in these countries. Restructuring of the water business led to a £11.5m exceptional charge.
Analysts at Deutsche Bank forecast adjusted pre-tax profits of £308m and EPS of 96.8p (from £275m and 88.9p in 2012).
SEVERN TRENT (SVT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,664p | MARKET VALUE: | £4bn | |
| TOUCH: | 1,664-1,665p | 12-MONTH HIGH: | 1,721p | LOW: 1,349p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 413p* | NET DEBT: | 404% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2012** | 1.77 | 157 | 72.5 | 70.1 |
| % change | +4 | -38 | -37 | +8 |
Ex-div: 20 Jun Payment: 27 Jul *Includes intangible assets of £161m, or 68p a share **Excludes special dividend of 63p to be paid on 27 July 2012 | ||||
