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Higher than expected metered water consumption has helped boost Severn Trent’s turnover, according to the company’s preliminary full year results.
For the year 2014/15, Severn Trent recorded an increase in turnover of 2.4 per cent to £1,518 million. This also helped to boost profit before interest and tax, with the company recording a 3.2 per cent increase on the previous year (up to £540.3 million).
Severn Trent was also able to reduce its cost of bad debt by 2 per cent “through better credit management”.
The results also take into account the sale of its water purification business in a £62 million deal with Italian firm De Nora.
Severn Trent chief executive Liv Garfield said that results and performance over the last year, and the 2010-15 AMP period have been “strong” and that is has helped lay solid foundations for AMP6.
This includes a number of efficiency savings, such as the management restructure announced in October, which means Severn Trent has already “locked in” £300 million of the £372 million efficiency savings that are required for AMP6.
Garfield added: “Our performance over the last year has also demonstrated where we are strong and the areas we need to focus on to drive improvement.
“We’ve made some significant cultural and operational changes to get our business in the best possible shape for AMP6. As a result, we are facing the future with confidence, despite one of the toughest price settlements in our history.”
Whitman Howard utilities analyst Angelos Anastasiou said the results “are reasonably ahead of expectations” and that “all seems to be on track for the start of the AMP6 period”.
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