Water company Severn Trent announced a one-off £150 million special dividend for shareholders, as the group cut leaks by 7% to a record low last year.
Announcing a 4.6% decline in full-year profits for 2011 to £275.3 million, Severn Trent managed to increase its normal dividend by 7.7% to 70.10p as well as to make a 63.0p one-off payment. The company, which in January increased prices by 5.2%, also said it would invest an additional £150 million to improve its infrastructure over the next three years, bringing the total amount it plans to spend to £1.75 billion.
The group, which supplies eight million houses in a region stretching from the Bristol Channel to the Humber and from mid-Wales to the East Midlands, was not among those hit by a hosepipe ban this year. Although the near-term prospect of a hosepipe ban has receded, fears persist there could be further impact from drought next year after the Environment Agency classified Severn Trent as being “high risk in case of a dry spring and summer”.
Severn Trent chief executive Tony Wray said: “We have beaten our leakage target, reduced supply interruptions, continue to forecast no water usage restrictions for our region this year and we maintained the lowest average charges for our customers.”
The group’s profits fell as metered users lowered their consumption.
