Dee Valley acquisition gives Severn Trent operating profit lift
Underlying profit before interest and tax (PBIT) for the six months to 30 September 2017 at Severn Trent Water was was up 4.4% to £287.8m on revenue of £850.4m – lifted 3.7% year-on-year by price increases and income from the first six months of ownership of Dee Valley Water.
Reported PBIT was off £0.6m from the same stage in the previous year at £296.1 m. The underlying PBIT figure was net of exceptional gains on pension exchange of £8.3m which were down from £21m at the previous interim. A fall in fair value losses on derivatives to £5m from £15.4m in 2016, and a £1.4m gain from joint venture shares after an interim loss of £0.9m in 2016 was offset by a £12m hike in finance costs to £110m to give pre tax income up £0.1m at £182m.
Severn Trent’s Business Services division reported a 22.4% increase in underlying PBIT to £16.4m with £9m coming from its renewable energy business. Turnover for the division was up 9.3% to £70.2m. The segment figures exclude the Italian and US business service operations and the non household retail operation which were all classified as discontinued for the current and preceding periods.
The company reported having achieved £660m of its projected AMP6 efficiencies of £770m.