Severn Trent PLC Incur Legal Costs Of £19M

Interim management statement from Severn Trent plc (LON:SVT) showed huge legal costs from turning down takeover bids.

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Severn Trent (LSE: SVT) today released an interim management statement, which covers the period from 1 April up to 16 July 2013.

The statement has been released ahead of its interim results, which are due to be released on 30 September, and suggest that trading across the group have been in line with its previous expectations.

Water prices for customers increased by 2% in November 2013, while actual consumption has seen a slow year-on-year decline that was in line with expectations.  In terms of capital expenditure, the group expects the total amount to remain between £600m and £620m.  This includes an outlay of around £15m to be spent on private drains and sewers, while the amount to be spent on infrastructure renewals will be between £135m and £145m.  Operating costs are expected to rise year on year, as a result of inflation and increases in quasi taxes.

It also detailed that the group received an approach from LongRiver Partners (a consortium led by Borealis Infrastructure Management) in May regarding a possible offer for the company. However, a month later, LongRiver decided against making a formal offer for the firm, which led to Severn Trent having to incur costs of around £19m in relation to legal and advisory services.

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> Chris does not own shares in Severn Trent.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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