Severn Trent group interim profit before tax up 18% net exceptionals
Severn Trent Water posted reported profit before tax or the six months to 30 September 2018 up 12.5% to £203.6m. Net an exceptional pension increase exchange gain of £8.3m in the same period of 2017-18 the pre tax profit was up 18%. year-on-year.
The impact of lower inflation on index-linked debt coupled with lower interest rates on new and refinanced debt brought net finance costs down by nearly 16% to £93.1 million with net losses on financial instruments at £1.5m down from £5m at the previous half-year stage.
The firm's reported profit before interest and tax (PBT) was up 1.4% to £299.1 m with no exceptional items. Underlying PBT including the £8.3m pension-related gain in the same period of 2017-18 was up 4.3%.
Group turnover was up 3.6% year on year at £881.5 million fuelled by price increases in its water and waste water business. Interim
Severn Trent has implemented a new arrangement in its segmental presentation in the current reporting period which will endure for future years. Sludge treatment will be moved from Water and Wastewater to join renewable power production under the Business Services division.
Under the previous arrangement water and wastewater reported sales up 41% at £822.5m. The new arrangement turnover – ex the bioresources business – £795m with on like of like comparison available.
Underlying PBT for the water and waste water segment was near flat at £279.2m with the new arrangement equivalent at £268.4m
The company claimed to have the lowest average combined bills in England and Wales. Bad debt was 2.1% of
regulated revenue – down on the previous year-end, but greater than earlier levels earlier “reflecting the tougher financial climate some of our customers find themselves in,” the company said.