Severn Trent raises guidance on business arm
Water giant Severn Trent has raised its guidance for the performance of its business services division this year following the sale of its North American operations for £48 million.
It said its guidance for the rest of its business services arm had been upgraded and: "We now expect growth in both revenue and profit before interest and tax in this segment, on a like-for-like basis."
Meanwhile, due to the opening up of retail competition in the industry this year, Severn Trent has forged a joint venture with fellow water giant United Utilities, called Water Plus, to handle all their business customers.
In a trading statement this morning, Severn Trent said: "It has strongly positioned itself in the new market, including winning a number of large multi-site customers such as Kwik-Fit and David Lloyd Leisure."
Severn Trent has more than eight million customers across Central England and Wales, including in Stafford, Wolverhampton, Birmingham and Shropshire. It also provides sewerage services to around 1.3 million people across Cannock to Stourbridge and West Bromwich who get their water from smaller Walsall-based rival South Staffs Water.
The company said it was continuing to work towards delivering total expenditure efficiences of £770 million for AMP6, the plan for managing its assets during the regulatory period from 2015 to 2020. It is also drawing up plans for AMP7, which will cover the next period from 2020 to 2025 which will be submitted to water watchdog Ofwat in September next year.
Severn Trent is also looking at its plans for the 2019 price change, which its said "looks set to be a challenging review".
"However, we are encouraged by the opportunities of higher financial returns for ambitious and innovative companies," Severn Trent added.
