As the September deadline looms for water companies to submit their business plans for the next regulatory period, the listed utilities are understandably keen to trumpet their achievements. Severn Trent (SVT) opens its full-year numbers on this point, highlighting its performance on reducing flooding, complaints and pollution while keeping customer bills low. Indeed, hitting the delivery targets set by the regulator Ofwat earned the group a net outperformance payment of £80m in the year to March 2018.
And it looks like there will be more money to spend on improving customer delivery in the coming year, as management plans to reinvest all of the £100m of cost savings made this year into the water business. The group has upped its forecast for total efficiencies between 2015 and 2020 to £870m to reflect the savings made in the reported period.
But the drive for efficiency can be costly in the short term, and a review of the group’s bioresource plants identified a number of inefficient sites that have now been closed. The resulting exceptional charges weighed heavily on the group’s statutory numbers. But strip those out and underlying EPS was up 4.6 per cent to 121p, a number that's expected to rise to 134p in the year to March 2019, according to analysts at Macquarie.
| SEVERN TRENT (SVT) | ||||
| ORD PRICE: | 2,089p | MARKET VALUE: | £4.9bn | |
| TOUCH: | 2,088-2,089p | 12-MONTH HIGH: | 2,575p | LOW: 1,664p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 420p | NET DEBT: | £5.36bn | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1.76 | 319 | 199 | 80.40 |
| 2015 | 1.80 | 148 | 48 | 84.90 |
| 2016 | 1.75 | 303 | 134 | 80.66 |
| 2017 (restated) | 1.64 | 328 | 139 | 81.50 |
| 2018 | 1.69 | 302 | 102 | 86.55 |
| % change | +3 | -8 | -25 | +6 |
| Ex-div: | 14 Jun | |||
| Payment: | 20 Jul | |||
