Severn Trent delivers profits for shareholders

24-08-2006

The UK's second-biggest listed water firm Severn Trent reported high profit taking yesterday despite repeated criticism over poor leakage management.

Turnover at Birmingham-based firm's water division rose 13.4 per cent to £1.15 billion, while profits were up 30 per cent to £400.4 million in the last financial year.

Pipes reportedly leaked 512 million litres of water every day over the past year, an average of 151 litres for each of the eight million customers it services.

The firm said it had spent £95 million renewing its infrastructure, up £18 million on year before and was replacing or improving up to six miles of pipes every week.

But Severn Trent water leakage record is adjudged one of the poorest in the country, second only to Thames Water.

And despite high profits, over the same period, bills increased by 15.2 per cent, while shareholders received a total dividend up from 48.51p to 51.13p.

In a statement, Severn Trent said it had delivered an "encouraging performance" in 2005/06.

Severn Trent said it did not need to impose hosepipe bans as reservoirs were currently over 97 per cent full or use special measures for customers over the summer period.

Separately, a spokesman for Water UK, last night defended the level of profit made by firms despite the poor leakage record.

Barry Clarke said profits were good for firms, good for investors, and good for customers as they could keep the cost of investments down.


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