Severn Trent prospers as the prices tap is opened

The cold, wet summer meant no need for extra watering on farms or gardens, sending Severn Trent’s water consumption down nearly 3% in the six months to October.

The utility firm today said commercial consumption, especially in agriculture, was lower than expected over summer. Household water use was also down — it was hardly a summer for children frolicking in sprinklers.

But lower usage was more than made up for by the industry regulator letting the company raise prices by 5.2%, leaving turnover up 3.6% to £917.7 million. After it upped investment in its sewers and water-treatment works to £239 million in the six months, underlying pre-tax profit fell 2.6% to £267.2 million.

The Severn Trent claimed its number of leaks, and pollution levels, were getting better, with September leakage around 4% lower than in March. The major time for leaks, however, is winter.

Trent last week broke ranks with Britain’s other major water suppliers by backing Ofwat’s plans to break their inflation-linked pricing agreements.  The current, five-year pricing deal linked to the retail price index runs until 2015.

Shares today fell 6p to 1550p.