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Severn Trent Profits Reduced To A Trickle

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http://business.timesonline.co.uk/tol/busi...icle6391114.ece

Severn Trent, Britain’s second-largest water company, reported a 13 per cent plunge in profits yesterday, blaming weaker demand for water from consumers and rising bad debts because of the recession.

The company said that demand had fallen by about 5 per cent because of the economic slowdown, although there were signs that conditions were starting to stabilise.

Severn Trent, which supplies water and sewage services to more than 3.7 million customers across Central England and Wales, reported a 13 per cent fall in pre-tax profits to £168 million for the year to March 31, from £192 million the previous year.

Its customers include Jaguar Land Rover plants that have cut production, as well as many manufacturing industries, including glass and brickmakers. These have been hit by the collapse of the property market.

Severn Trent had warned earlier that the closure of High Street stores such as MFI and Woolworths had also reduced water usage. The company said that lower commercial consumption of water had cost it £20.8 million in lost income. Tony Wray, the chief executive, said: “We’re currently seeing 5 per cent [monthly decline, year on year].†Bad debt grew by £6.6 million to £34 million, representing 2.3 per cent of total turnover.

Despite the weaker performance, the company announced an increase in its full-year dividend of 2.6 per cent to 67.34p a share. Turnover increased by 5.8 per cent to £1.6 billion.

Sir John Egan, the chairman, said: “Despite the impact of the economic environment on consumption and bad debts, and our already announced increase in investment in infrastructure, Tony Wray and his team delivered stable underlying group profits. That’s because we continue to deliver on our plans to raise standards and keep down charges through our focus on continuous improvement in all our processes.â€

A 5% reduction in consumption does appear to be suggesting the economy is contracting violently.

Vote Brown save the world. :ph34r:

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Surely they should be celebrating that there is a reduction of 5% in water usage.

What with Climate change and a proposed draught coming :lol::lol:

When I read that water consumption had dropped my first thought was we can expect drought orders to be in place this summer due to water shortage and the consumer recklessly wasting water.

Perhaps we should all help the water companies out and waste water to save jobs?

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Despite this fall in profit I still take it that a profit has been made?

Shysters

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Despite this fall in profit I still take it that a profit has been made?

Shysters

Indeed. a 13% fall is hardly "reduced to a trickle".

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Of greater concern should be the massive amount of debt SVT has built up over the last 10 years. This is all having to be refinanced at much higher rates that they planned for.

Ofwat has been asleep at the wheel.

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Indeed. a 13% fall is hardly "reduced to a trickle".

Exactly, this article has been written by a clown, its more a pun on water and trickle than real fact. Anyway what the hell has Severn Trent got to do with house prices, are they now builiding houses?

Get out more guy, its a beautiful day, i'm off to the south coast! :rolleyes:

Edited by Jimmy2Times

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it's all water under the bridge now

13% is a piss in the river anyway

lets just hope they dont sink under all that debt

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They should all be nationalised, plain and simple. The concept of privatisation was that they would take over the business and further develop it using their own funds.

What has happened is they have taken over a nationalised business and then plundered it. They have not invested in new infrastructure as there is no point in their minds in wasting money to produce more water, as its in their interests to make it a scarce resource and put up prices by using their monopoly position.

The same goes for the electric companies and the Gas companies.

Ask yourself why Taxpayers are being asked to fund the new nuclear reactor programme ? Why are the electric companies not building them out of their own funds if its privatised ?

The fact is that some things must remain in Government hands, and for me thats Health, Transport, Power, and Water. All of these are essential to our economic progress and are essential to maintain national security.

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A 5% reduction in consumption does appear to be suggesting the economy is contracting violently.

... or that last year was a particularly wet season, so farmers and gardeners didn't need water supplied by them, and people perhaps needed a little less than over a hot summer for personal consumption.

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they'll be demanding a Bailout, as liquidity dries up, dam them all. Float them off I say.

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They should all be nationalised, plain and simple. The concept of privatisation was that they would take over the business and further develop it using their own funds.

What has happened is they have taken over a nationalised business and then plundered it. They have not invested in new infrastructure as there is no point in their minds in wasting money to produce more water, as its in their interests to make it a scarce resource and put up prices by using their monopoly position.

Totally agreed on that! I made a good living for a couple of years being contracted out to a "Water Company"!

I was surprised by the number of "nobs in suits" being payed far more than I was for doing much less!

Most of these were ex-employees... :(

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