Business

Severn Trent profits tumble despite rise in revenues

water tap
Image caption Severn Trent said it was making good progress despite difficult market conditions

Severn Trent's profits have halved despite a rise in revenues, as the water firm faced a series of charges.

Half-year pre-tax profits at the firm, which serves eight million customers, have fallen from £208.2m to £101.1m.

Without the charges profits fell 16%. The firm said extra costs for restructuring and infrastructure spending had held back profits.

Severn Trent said trading conditions were challenging and it was nearing the end of a major period of change.

Severn Trent's revenues rose 1.9% to £867.9m for the six months to the end of September.

The company cut its interim dividend by 2.5% to 26.04p, and introduced a new dividend policy for the period between 2011-12 and 2014-15.

"The board has decided that the dividend policy for Severn Trent for the period should be RPI plus 3%," the company said in a statement.

Tony Wray, chief executive, said: "We have continued to raise standards and drive greater efficiency across the business, with good progress in many key areas including further improvements in customer service, sewer flooding and leakage."

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