LONDON --Severn Trent (LSE: SVT.L ) delivered a wholly uneventful report on its first-quarter activities. Water consumption declined as expected. Forecast bad debt expense remained at 2.2% for the year. Expectations for operating expenses and capital expenditure are unchanged.
Perhaps the only surprise was a joint venture with Costain (LSE: COST.L ) announced in late June, which is expected to take advantage of new government efforts to introduce competition into the country's water market. This new business is targeting high-volume commercial and industrial customers looking for a single provider for operations that may be located around the country.
However, with uncertainty swirling, the type of predictability offered by Severn Trent is just what investors are looking for -- as is the healthy dividend yield, which remains at 4.1%. Severn Trent and its fellow water utilities Pennon Group and United Utilities have seen their shares rise more than 10% since the beginning of the year, far surpassing the FTSE All-Share's 2.2% rise.
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