Profits fall at Severn Trent

Severn Trent, the country's biggest water company, yesterday revealed the cost of its conservation drive as it reported a 3 per cent fall in profits for the first half.

The increasing number of meters being fitted in domestic premises and more efficient water consumption by industrial customers meant an pounds 8.5m reduction in income.

The fall in revenue was only partially offset by pounds 7m in cost reductions and group profits for the six months ended 30 September fell from pounds 197m to pounds 191.3m.

Profits from non-regulated businesses, principally the waste management business, Biffa, grew by 10.6 per cent. But the Severn Trent management, led by Vic Cocker, chief executive, conceded it would be a tough task to offset the decline in core revenues by growing unregulated businesses.