BAD debt at Severn Trent Water is expected to remain at 2.3% as the company spends extra hours repairing increased leakages following last month’s severe freeze.
In an interim management statement today, the Coventry-based utility said it believed bad debt would stay at just above 2% for the full year, assuming no significant deterioration in the UK economy.
Covering the period October 1, 2010 to yesterday, the statement also said Severn Trent was working to bring down leakage rates as rapidly as possible and treated water storage levels are back to normal.
It added: “It is too early to evaluate the impact on annual leakage performance, which will be assessed post March year end.
“The additional cost of repairing these leaks is not material in the context of total current annual operating expenditure.”
The statement went on to say water consumption levels across its measured income base in the second half of 2010/11 were consistent with the levels seen in the second half of the previous financial year.
Operating expenditure continues to be in line with the firm’s expectations for the year and below the level assumed in the final determination.
The recent bad weather also reduced the company’s level of activity on its capital programme.
For the full year 2010/11, it said it expected net capital expenditure to be in the range of £400m to £410m, assuming temperatures remain closer to average levels for the remainder of the winter.
The level of net infrastructure renewals expenditure included in this figure is anticipated to be in the range of £95m to £100m.
Severn Trent will announce its preliminary results for the financial year ending March 31 in May.
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