Profits slump at Severn Trent Water

PRE-TAX profits have taken a hit at Coventry-based utility Severn Trent Water as it dealt with the aftermath of the coldest December on record.

In its preliminary results for the 12 months ended March 31, 2011, the plc reports a drop in profit before tax of 24% from £334.4m to £253m.

Underlying profit before interest and tax dropped 6% year-on-year from £557.1m to £519.1m while underlying group profit before tax fell from £338.4m £288.6m.

Group turnover did show a small spike with a rise of 0.4% from £1.703bn to £1.711bn.

Chief executive Tony Wray said: “We have made a good start to our new regulatory period, with planned operational expenditure for the year below the level of the final determination.

“We have delivered on planned outputs and are realising the benefits of efficiency programmes such as the move of 1,300 people into our new operations centre in Coventry.

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“Thanks to the support and dedication of our people, Severn Trent Water responded to the coldest December on record by deploying additional resources to restore service to our customers.

“We also made good progress with contractors on our capital programme and are delivering efficiencies.

“As a result of the weather impacts on our 2010/11 capital programme, and plans to improve resilience, we will invest more in our network this coming year.”