Shares in Severn Trent (LSE: SVT) dipped slightly in early trade this morning, following the release of its half-yearly report for the six months to 30 September 2013.
At £141.3m, underlying pre-tax profit decreased by 5.8% against £150m in H1 2012 due to rising power costs and the adoption of private drains. However, turnover increased (albeit marginally), up 0.5% to £922.4m.
Shareholders will be cheered by the 6% rise in the interim dividend, lifted to 32.16p per ordinary share. This puts Severn Trent on a ‘FTSE 100 average’-beating yield of 4.3%.
Chief executive Tony Wray commented:
“We have delivered again on our commitments to our stakeholders, with below inflation rises in customer bills, further investment to deliver operational improvements, higher levels of service to customers and sustainable, progressive returns for shareholders with the interim dividend growing in line with our policy.
“We are close to finalising our Business Plan for AMP6, after a comprehensive, 18 month stakeholder engagement programme, which involved around 15,000 customers in research and 25 meetings of the Severn Trent Water Forum, our customer challenge panel.
“Our Business Plan, to be submitted by 2 December, will reflect our customers’ priorities and strike the right balance between affordability, investment to maintain and improve our service and environmental standards, and appropriate returns for shareholders.”
Elsewhere in the interim results, the group confirmed that the financial results are in line to deliver full-year expectations, while ‘bad debt’ remains stable and among the lowest in the industry — new CEO Liv Garfield, set to take the reins next spring, ought to be pleased with the state of the ship she’s taking control of, then.
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> Sam does not own shares in Severn Trent.