Severn Trent Profit Rises After Infrastructure Investments

Utilities giant Severn Trent has reported a rise in profits for the year, thanks in part to investments made in its infrastructure.

Britain's biggest listed water company said underlying pre-tax profit rose 4.3 per cent to £525million in the year to March as turnover increased 3.7 per cent to £1.8 billion. 

The company announced a final dividend of 48.9p, taking the full-year dividend to 81.5p per share. This is marginally down on the 83.2p paid in 2016. 

Shares in Severn Trent climbed 1.4 per cent to 2,482p on the news.

The company said its performance had been helped by fewer leaks over the year than it had seen during the previous one.

The reduction in things such as sewer floodings, supply interruptions and leakages came due to the £680 million of investment it has made in its infrastructure starting to take effect.

The water supplier also said 'total efficiency savings' will hit £770 million by 2020, up £100 million.

Chief executive Liv Garfield added that the company will seek to up its dividends going forward.

'These numbers have been delivered on the back of cost efficiencies and lower supply interruptions and leakages,' noted Helal Miah, investment research analyst at The Share Centre. 

'Whilst these results are encouraging and the dividend going forward will be improved, it still yields less than other listed utilities which we prefer such as National Grid and United Utilities. We therefore continue to recommend Severn Trent as a 'hold' for investors seeking income and willing to accept a low level of risk.'

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Taxonomy

• Leakage
• Infrastructure
• Leakage Reduction
• Investment Planning
• Infrastructure Management
• Investments