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Severn Trent’s annual profits jump despite £22mln hit from last summer’s heatwave

Severn reported a 7.8% rise in pre-tax profits to £563mln in the 12 months ended 31 March, helped by lower tax rates and cheaper interest repayments

water reservoir
Severn Trent supplies water to homes and businesses across the midlands

Profits at Severn Trent PLC (LON:SVT) jumped by almost 8% last year, despite the huge costs associated with “one of the hottest and driest summers” on record.

The FTSE 100-listed water company said last year’s record heatwave added an extra £22mln to its cost base.

READ: JPMorgan Cazenove pulls the plug on Severn Trent and Pennon

However, Severn Trent still reported a 7.8% rise in pre-tax profits to £563mln in the 12 months ended 31 March (2018: £527mln), helped by lower tax rates and cheaper interest repayments. Group turnover rose 4.2% to £1.77bn (2018: £1.69bn).

In line with its policy to raise its dividend by the retail price index (RPI) inflation plus 4%, the company upped its final pay-out by 7.9% to 56.02p.

“This has been a year where our teams have really stepped up, whether in response to customer needs in the face of one of the hottest and driest summers we've seen or by being named by Ofwat as one of the top companies in the sector when we received fast-track status for our future plans,” said the firm's chief executive Liv Garfield.

Severn Trent shares edged 0.7% higher to 1,934p in early deals on Tuesday.

Quick facts: Severn Trent

Price: 2270 GBX

LSE:SVT
Market: LSE
Market Cap: £5.4 billion
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