Interim Management Statement

RNS Number : 8948H

Severn Trent PLC

18 July 2012

 



18 July 2012

Severn Trent Plc Interim Management Statement

for the period 1 April to 17 July 2012

The Board of Severn Trent Plc confirms that trading across the group has been in line with its expectations and prior guidance.   

No new material trading events or transactions have occurred during the period 1 April to 17 July 2012.

Customer prices in Severn Trent Water increased by 5.2% (including inflation) from 1 April 2012. Consumption across our measured income base has declined year on year in the period, in line with our expectations.

We continue to forecast a bad debt level around 2.2% of turnover for the full year, although we continue to monitor future developments closely, especially unemployment levels.

Operating expenditure continues to be in line with the Board's expectations for the year and on a like for like basis in line with the level of the Final Determination. Operating costs are expected to rise year on year, due to the impact of inflation, a full year of operating private drains and sewer assets, and increases in quasi taxes, offset by efficiency improvements.

Expectations for net capital expenditure (UK GAAP after deducting grants and contributions) remain in the range £570 million to £590 million, including an estimated £15m related to private drains and sewers. The level of net infrastructure renewals expenditure included in this range is anticipated to be £140 million to £150 million.

For the full year, Severn Trent Services is expected to deliver low single digit revenue growth, with PBIT impacted by investment in Operating Services and BALPURE®, which will offset some underlying growth in the business.

Based on current RPI expectations, the group interest charge is expected to be slightly lower year on year, before adjustments related to pension accounting, with a reduction in the non-cash interest charge, due to lower RPI, partially offset by higher cash interest cost, due to higher net debt.

The expected effective current tax rate for the group for 2012/13 remains at 24% to 26%.

On 28 June 2012 Severn Trent announced that Severn Trent Plc and Costain Group PLC have entered into a new Joint Venture - Severn Trent Costain -  to provide complete business water and wastewater management services to high volume commercial and industrial water users in the UK.

Severn Trent Plc will announce its interim results for the period ending 30 September 2012 on 27 November 2012.

Enquiries:

Tony Wray	Severn Trent Plc	0207 353 4200 (on the day)
Chief Executive		02477 715000
Mike McKeon	Severn Trent Plc	0207 353 4200 (on the day)
Finance Director		02477 715000
Rob Salmon	Severn Trent Plc	0207 353 4200 (on the day)
Head of Communications		02477 715000
John Crosse	Severn Trent Plc	0207 353 4200 (on the day)
Head of Investor Relations		02477 715000
Anastasia Shiach / Martha Kelly	Tulchan Communications	0207 353 4200

Forward-Looking Statements:

This document contains certain 'forward looking statements' with respect to Severn Trent's financial condition, results of operations and business and certain of Severn Trent's plans and objectives with respect to these items.

Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'reasonably possible', 'targets', 'goal' or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.

There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates.

All written or verbal forward looking statements, made in this document or made subsequently, which are attributable to Severn Trent or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Severn Trent does not intend to update these forward looking statements.

Nothing in this document should be regarded as a profits forecast.

This document is not an offer to sell, exchange or transfer any securities of Severn Trent Plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended).

 

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