Severn Trent hikes dividend despite profit drop as the company vows to keep water bills down

Severn Trent saw underlying pre-tax profits drop 5.8 per cent to £141.3 million for the six months to October

Severn Trent, the UK's second-largest water supplier, has raised its dividend while boasting its customers pay the lowest water and sewerage bills in England and Wales.

Amid soaring energy bills and a  raging row about the cost of living in Britain, Severn Trent’s chief executive Tony Wray said: “We set out with a deliberate strategy to have the lowest charges in the UK, and that’s what we’ve done.  This year our prices are 1 per cent below inflation, next year they will be 1.1 per cent below inflation. We’re committed to keeping our prices as low as we can, as well as keeping on investing. We can do that because we constantly work on becoming more efficient.”

Trent’s own profits fell after the cost of maintaining a raft of private drains and sewers became its responsibility. The Midlands-focused utility, which last week hired BT’s Liv Garfield as its new chief executive, saw underlying pre-tax profits drop 5.8 per cent to £141.3 million for the six months to October. The interim dividend was still raised 6 per cent to 32.16p.

Industry regulator Ofwat has praised Trent and others for swallowing extra costs and passing on the benefits of continual record low interest rates  —  which were not predicted at the start of the  current regulatory period in 2010  —  to customers. Trent has spent an extra £150 million on investing in the water network. By contrast, London supplier Thames Water wanted to hike customers’ water bills by an extra £29 next year to spend more on sewerage, a request that was denied by Ofwat.

Wray said Trent’s low bills supported its campaign to open up the industry to competition. “We firmly believe those that can  perform well should have the opportunity to do that on a wider basis,” he added. “We look forward to there being greater competition in this sector. And we’ll play our part.”

He said he was “very conscious” of the furore around energy bills: “Our customer base has seen their average earnings rise less than rate of inflation. It’s difficult out there for everybody, so the responsible thing to do is to keep our prices down.”

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine