Severn Trent to sell off land assets to keep prices down
Midlands utility Severn Trent is to sell off some of its land assets to help prevent it from having to pass on cost increases to its customers.
The water company struct a philanthropic note when it issued the announcement as part of its interim results statement, saying the move would help to address housing shortages and create new jobs.
The announcement is also timely given the pledge by the Chancellor in Wednesday’s Budget to increase the volume of housing by the mid-2020s.
The land is being made available after the business completed a programme of operational efficiencies.
Liv Garfield, chief executive, Severn Trent, said: “We have announced plans to sell surplus land over the next 10 years. This will help keep bills low, as a proportion of profits will be shared with customers through an end of AMP Regulatory Capital Value (RCV) adjustment.
“These plans will benefit our communities, help to address the housing shortage and create new jobs.”
The company has also revealed plans to merge its contact centre staff with its network distribution and planning teams, which it said would create a more seamless customer offer.
Overall, the group said its half-year performance reflected strong ongoing demand.
In the six months to September 30, group turnover grew 3.7% to £850.4m, an increase of £30.4m. This was mainly due to allowed price increases in its Regulated Water and Waste Water business, the acquisition of Dee Valley and growth of its Business Services businesses.
Underlying pre-tax profit grew 4.4% to £287.8m, an increase of £12.1m.
It has recommended an interim dividend of 34.63p, a rise of 6.2%.
Its major acquisition, Dee Valley Water, contributed £12.5m to turnover and £3.6m to underlying pre-tax profit during the period.
