Severn Trent (LON:SVT) has updated investors on its recent trading performance.
Highlights from the company statement:
Our focus continues to put the customer at the heart of everything we do. We have made a good start towards delivering our target net reward for 2017/18 customer ODI1 outperformance of around £23 million, whilst also continuing to work towards delivering totex2 efficiencies of £770m in AMP63. We are making good progress on our business plan for AMP74, which will be submitted to Ofwat in September 2018.
On 11 July 2017, Ofwat published its draft methodology consultation for PR195. As expected, PR19 looks set to be a challenging review. However, we are encouraged by the opportunities of higher financial returns for ambitious and innovative companies. On 14 July 2017, Liv Garfield, Chief Executive and Dr Tony Ballance, Director, Strategy & Regulation, hosted a webcast discussing our views on the methodology consultation in more detail. This can be accessed via our website at www.severntrent.com
Following the successful acquisition of Dee Valley in February 2017, integration of the business is progressing well.
We are also encouraged by the ongoing progress of our Water Plus joint venture. 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.
The sale of our North American business was announced on 3 July 2017. As a consequence of that disposal and the disposal of our Italian business on 23 February 2017, we will be restating our accounts to classify these activities as discontinued operations and have set out the impact of this restatement below.
As a result of the reclassification of our North American business to discontinued operations, the guidance for the remainder of our Business Services segment has been upgraded. We now expect growth in both revenue and profit before interest and tax in this segment, on a like-for-like basis.
Other than the above, there has been no material change to current year business performance or outlook since the full-year 2016/17 results presentation on 23 May 2017. The Board continues to expect that the Group will deliver full-year trading performance in-line with its expectations and prior guidance.