Last checked at 25 Jan 2011 07:00
25 January 2011
Severn Trent Plc Interim Management Statement
for the period 1 October 2010 to 24 January 2011
The Board of Severn Trent Plc confirms that no new material trading events or transactions have occurred during the period 1 October 2010 to 24 January 2011.
Severn Trent Water
As guided at the half year results, it is expected that in Severn Trent Water consumption levels across our measured income base in the second half of 2010/11 will be consistent with the levels seen in the second half of the previous financial year (2009/10).
Operating expenditure continues to be in line with the Board's expectations for the year and below the level assumed in the final determination.
Bad debt is expected to remain at around 2.3% of turnover for the full year, assuming no significant deterioration in the UK economy.
The recent extreme weather has had some impact on operations, with the prolonged period of freezing temperatures reducing the level of activity on our capital programme. For the full year 2010/11, we now expect net capex to be in the range of £400 to £410 million (UK GAAP after deducting grants and contributions), assuming temperatures remain closer to average levels for the remainder of the winter. The level of net infrastructure renewals expenditure included in this figure is anticipated to be in the range of £95 to £100 million.
Severn Trent Water has seen an increase in leakage above normal levels for the winter due to the recent extended periods of freezing temperatures followed by a thaw. Severn Trent Water has deployed additional resources and is working to bring leakage rates back down as rapidly as possible and treated water storage levels are back to normal. It is too early to evaluate the impact on annual leakage performance, which will be assessed post March year end. The additional cost of repairing these leaks is not material in the context of total current annual operating expenditure.
Group
Group exceptional charges of around £20 - £25 million are expected for the full year, mainly related to ongoing efficiency improvements and accelerated deprecation of assets.
Higher inflation (on around £1bn of index linked debt) will impact the interest charge for the full year, as previously noted. It is expected the interest charge will rise by around £20 million vs. the prior year, before adjustments related to pension accounting.
It is expected that the effective current tax rate for 2010/11 will be towards the upper end of the 25% to 28% range previously guided.
Severn Trent Plc will announce its preliminary results for the financial year ending 31 March 2011 on 27 May.
Enquiries:
Tony Wray | Severn Trent Plc | 0207 353 4200 (on the day) |
Chief Executive | 0247 7715000 | |
Mike McKeon | Severn Trent Plc | 0207 353 4200 (on the day) |
Finance Director | 0247 7715000 | |
Rob Salmon | Severn Trent Plc | 0207 353 4200 (on the day) |
Head of Communications | 0247 7715000 | |
John Crosse | Severn Trent Plc | 0207 353 4200 (on the day) |
Head of Investor Relations | 07775 226260 | |
Mal Patel / Martha Kelly | Tulchan Communications | 0207 353 4200 |
Forward-Looking Statements:
This document contains certain "forward-looking statements" with respect to Severn Trent's financial condition, results of operations and business, and certain of Severn Trent's plans and objectives with respect to these items.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", "due", "could", "may", "should", "expects", "believes", "intends", "plans", "targets", "goal" or "estimates". By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; changes in the markets from which the group raises finance; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates.
All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Severn Trent or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Severn Trent does not intend to update these forward-looking statements.