Severn Trent delivers boost in business arm

The Shropshire water supplier won the battle to take over the Mid and North Wales based company earlier this year, and has now pointed to positive progress in the deal since then.

It came as the company delivered a trading update for the period from April 1 to July 19, in which it said it expects to meet investors' expectations for its financial performance.

It also raised the guidance for the performance of its business services division, following the sales of its North American operations for £48 million.

It said its guidance for the rest of its business services arm had been upgraded and: "We now expect growth in both revenue and profit before interest and tax in this segment, on a like-for-like basis."

Meanwhile because of the opening up of retail competition in the industry this year, Severn Trent has forged a joint venture with fellow water giant United Utilities, called Water Plus, to handle all their business customers.

In a trading statement this morning, Severn Trent said: "It has strongly positioned itself in the new market, including winning a number of large multi-site customers such as Kwik-Fit and David Lloyd Leisure."

Severn Trent has more than eight million customers across Central England and Wales, including in Shropshire.

The company said it was continuing to work towards delivering total expenditure efficiences of £770 million for AMP6, the plan for managing its assets during the regulatory period from 2015 to 2020.

It is also drawing up plans for AMP7, which will cover the next period from 2020 to 2025 which will be submitted to water watchdog Ofwat in September next year.

Severn Trent is also looking at its plans for the 2019 price change, which its said "looks set to be a challenging review".

"However, we are encouraged by the opportunities of higher financial returns for ambitious and innovative companies," Severn Trent added.