Severn Trent profits fall despite revenue hike

23rd Nov 2010 07:05

Water Group Severn Trent posted a fall in profits in the six months to 30 September despite higher revenues, after facing a number of charges. The company, which serves 8m customers across England and Wales, said pre-tax profits fell to £101.1m from £208.2m the previous year on turnover that rose to £867.9m from £852.1m.At Severn Trent Water, depreciation increased by £15.8m. There was an increase in infrastructure renewals expenditure of £8.9m. At the services business, there was an exceptional charge of £6.2m arising from restructuring. Severn Trent said it had seen positive trends in consumption against expectations, helped by the dry summer and robust commercial demand. Sales prices were lower at Severn Trent Water, however.Conditions remain challenging at the services business, Severn Trent said.The company is paying an interim dividend of 26.04p, an increase of 2.5% from the same period a year ago. It also announced a new dividend policy, which will see the company pay out 3% plus the retail price index (RPI) increase from 2011 to 2015.'We have continued to raise standards and drive greater efficiency across the business with good progress in many key areas including further improvements in customer service, sewer flooding and leakage,' said chief executive Tony Wray.