Severn Trent share price dips as water company prepares to slash 500 jobs after profits drop
Water company Severn Trent is preparing to cut 500 jobs after reporting a 27.7 per cent reduction in profit before tax during the six months to 30 September 2014, dropping from £191m to £138m.
However, underlying profit before tax was up 10.3 per cent to £156m from £141m, while turnover improved by 2.7 per cent, from £922m to £947m.
The utilities firm is waiting for a final determination on the rates it is permitted to charge from water regulator Ofwat.
The watchdog is due to deliver the results of its review into prices on 12 December, and then Severn will have two months to decide whether or not to refer that determination to the Competition and Markets Authority.
The company’s chief executive Liv Garfield said: “In the light of that, we will be able in early 2015 to communicate our future dividend policy.”
Garfield added: “Our focus on customers continues; our average combined bill is the lowest in the land and we are confident of maintaining the lowest bills for the next five years; we continue to develop our range of social tariffs; and we have delivered further reductions in leakage and sewer flooding. We have also delivered on our commitments to other stakeholders, with further reductions in pollution incidents and our interim dividend in line with our current policy.”
Severn Trent’s shares dipped by 0.34 per cent yesterday.