Severn Trent IMS February 2012
The Board of Severn Trent Plc confirms that trading across the group has been in line with its expectations. No new material trading events or transactions have occurred during the period 1 October 2011 to 16 February 2012.
Severn Trent Water
Consumption levels across our measured income base for FY 2011/12 are expected to lower year on year, in line with the trend seen in the first half.
The level of bad debt for the full year is expected to remain broadly stable compared with the first six months, although we continue to monitor future developments closely, especially unemployment levels.
Operating expenditure continues to be in line with the Board's expectations for the year, and below the level allowed in the Final Determination. Operating costs are expected to rise year on year, due to the impact of inflation, prudent investment in our networks, and quasi taxes (including the CRC levy), partially offset by efficiency savings.
Expectations for net capital expenditure (UK GAAP after deducting grants and contributions) remain in the range 450 million to 470 million. The level of net infrastructure renewals expenditure included in this figure is anticipated to be 120 million to 130 million. Both figures exclude the costs of Private Drains and Sewers (PDaS).
Severn Trent Water is not currently predicting any usage restrictions this year, despite record low rainfall over the winter period. This situation remains under constant review however and the company is taking steps to improve supply resilience this year. Severn Trent Water has maintained its focus on continuous improvement and is on course to meet its 2011/12 leakage target. Severn Trent Water is one of only 3 companies that is targeting reduced leakage year on year over the current regulatory period.
Work volumes related to Private Drains and Sewers continues to be at the lower end of initial expectations. The company will provide FY 2011/12 costs, and updated capital and operational expenditure estimates for the remainder of the current regulatory period, with its Preliminary Results in May.