Severn Trent boosted as fall in bus…
Saturday, January 30th, 2010 Uncategorized.
By Sean Farrell
Published: 8:31PM GMT 26 Jan 2010
Severn Trent
In a trading update yesterday, Britain’s second-biggest water company said the impact on full-year revenues would be between £5m and £10m, down from its earlier estimate of £15m to £20m.
Water use by commercial customers that are able to measure their consumption fell sharply during the recession as businesses folded or cut costs.
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Severn Trent’s commercial customers included the high street stores of the Woolworth and MFI retail chains, which have since closed, and car manufacturers Land Rover and Jaguar, which saw production hit by the downturn.
The water company said that the recent freezing weather had increased leaks in its pipes and that it had brought in extra resources to deal with the problem “as rapidly as possible”.
“It is too early to evaluate the impact on annual leakage performance, which will be assessed post March year end,” the company said. “The additional cost of repairing these leaks is not material in the context of total annual operating expenditure.”
Capital expenditure for the full year will be between £610m and £630m.
Customer bad debts held steady at about 2.3pc of turnover and the company said it would continue to monitor future developments closely. Trading since the beginning of October was in line with expectations.
Severn Trent supplies the Midlands, including Nottingham and Birmingham, and mid-Wales. The largest water company is United Utilities.
The company said last week it would not challenge pricing restrictions set by Ofwat, the regulator.