LONDON -- Severn Trent (SVT -0.24%) this morning released its preliminary results for the year to March 31, 2013, with group turnover rising 3.4% to £1.83 billion.
Pre-tax profit -- including losses on financial instruments of £45.3 million -- rose 37.3% to £215.2 million, but this was aided by a decrease of £22.4 miliion in the aforementioned losses compared to 2012.
Underlying group pre-tax profit fell 3.3% to £266.3 million, with the company claiming bad weather in the early part of the year drove higher operational activities and costs at the regulated business, Severn Trent Water.
Severn Trent Services, the non-regulated business, saw continued investment in business development, with management stating they see "future growth potential" in the area.
Chief executive Tony Wray commented:
Our focus on continuous improvement has once again delivered a good financial and operational performance.
From a financial perspective, Severn Trent Water delivered further efficiency gains, with PBIT stable year on year, despite incurring additional infrastructure investment costs and costs related to the adoption of private drains and sewers (PDaS), which together totalled £25 million.
In our non-regulated business we delivered like for like revenue growth of 5% as expected, and we continued to invest in growth areas of the business.
It has been a busy few weeks for the water company, after a bid was made by a consortium made up of Borealis Infrastructure Management, the Kuwait Investment Office and Universities Superannuation Scheme Limited -- and swiftly rejected after Severn Trent's board claimed that the proposal completely failed to recognise the group's value.
With the shares rising marginally to 2,038p in early trade, the company now yields a healthy 3.7%. Management also confirmed that the full-year dividend for 2013/14 is set to be lifted by 6%, in line with Severn Trent's RPI+3% growth policy, to 80.40p.
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