TIDMSVT
RNS Number : 2829J
Severn Trent PLC
08 September 2016
Restatement of prior-year results following the reclassification
of the non-household retail activities as discontinued
operations
Severn Trent Plc announces the restatement of prior-year results
as a consequence of the reclassification of the non-household
retail activities as discontinued operations. These activities are
restated following the formation of the Water Plus joint venture
(JV) with United Utilities, which completed on 1 June 2016
following Competition and Markets Authority approval on 3 May 2016.
For the full financial year to 31 March 2017, the results for the
Group will therefore include two months of discontinued operations
for non-household retail operations, and ten months of the Group's
50% share of the JV.
The following restatement of 2015/16 half-year and full-year
data at this time is to assist investors and analysts in their
financial modelling of the Group, in advance of the half-year
2016/17 results, which will be announced on 24 November 2016.
As a result of this announcement there is no material change to
current year business performance or outlook since the full-year
2015/16 results on 24 May 2016.
Summary restatement
Prior year ended 31 March 2016:
Regulated
Water
and Waste Business Corporate Consol
Water Services and Other adjs Group
GBPm GBPm GBPm GBPm GBPm
Turnover:
From continuing
operations
As previously reported 1,506.1 674.6 3.2 (397.0) 1,786.9
Non-household retail - (397.9) - 364.7 (33.2)
Restated 1,506.1 276.7 3.2 (32.3) 1,753.7
------------------------ ----------- ---------- ----------- -------- --------
From discontinued
operations(1)
As previously reported - 29.7 - - 29.7
Non-household retail - 397.9 - - 397.9
Restated - 427.6 - - 427.6
------------------------ ----------- ---------- ----------- -------- --------
Profit before interest, tax and exceptional items
(PBITE)(2) :
From continuing
operations
As previously reported 492.1 38.2 (7.9) 0.4 522.8
Non-household retail (9.6) (9.8) - - (19.4)
Restated 482.5 28.4 (7.9) 0.4 503.4
------------------------ ----------- ---------- ----------- -------- --------
From discontinued
operations
As previously reported - 2.1 - - 2.1
Non-household retail - 19.4 - - 19.4
Restated - 21.5 - - 21.5
------------------------ ----------- ---------- ----------- -------- --------
-- Group turnover from continuing operations reduced by GBP33.2
million. This represents the sales of the Severn Trent Water
non-household retail business and of our out of area retail
business mainly in Scotland (GBP397.9m), less the sales from our
wholesale business to our non-household retail business
(GBP364.7m). Group PBITE from continuing operations is restated by
GBP19.4 million.
-- Business Services turnover from continuing operations reduced
by GBP397.9 million and PBITE from continuing operations is
restated by GBP9.8 million.
-- Regulated Water and Waste Water turnover is unaffected, but
PBITE reduced by GBP9.6 million to reflect the share of costs
incurred in Regulated Water and Waste Water that were previously
reallocated to non-household retail operations. As these activities
are not transferring to the JV they are deemed to remain with
Regulated Water and Waste Water for the purpose of this
restatement.
-- Discontinued operations turnover increased by GBP397.9
million and PBITE increased by GBP19.4 million.
Summary restatement
Prior six months ended 30 September 2015:
Regulated
Water
and Waste Business Corporate Consol
Water Services and Other adjs Group
GBPm GBPm GBPm GBPm GBPm
Turnover:
From continuing
operations
As previously reported 754.4 337.3 3.0 (198.6) 896.1
Non-household retail - (203.2) - 185.7 (17.5)
Restated 754.4 134.1 3.0 (12.9) 878.6
------------------------ ----------- ---------- ----------- -------- -------
From discontinued
operations(1)
As previously reported - 29.7 - - 29.7
Non-household retail - 203.2 - - 203.2
Restated - 232.9 - - 232.9
------------------------ ----------- ---------- ----------- -------- -------
Profit before interest tax and exceptional items
(PBITE):
From continuing
operations
As previously reported 270.2 17.3 (5.8) (0.7) 281.0
Non-household retail (4.8) (6.1) - - (10.9)
Restated 265.4 11.2 (5.8) (0.7) 270.1
------------------------ ----------- ---------- ----------- -------- -------
From discontinued
operations(1)
As previously reported - 2.1 - - 2.1
Non-household retail - 10.9 - - 10.9
Restated - 13.0 - - 13.0
------------------------ ----------- ---------- ----------- -------- -------
-- Group turnover from continuing operations reduced by GBP17.5
million This represents the sales of the Severn Trent Water
non-household retail business and of our out of area retail
business mainly in Scotland (GBP203.2m), less the sales from our
wholesale business to our non-household retail business(GBP185.7m).
Group PBITE from continuing operations is restated by GBP10.9
million.
-- Business Services turnover from continuing operations reduced
by GBP203.2 million and PBITE from continuing operations is
restated by GBP6.1 million.
-- Regulated Water and Waste Water turnover is unaffected but
PBITE reduced by GBP4.8 million to reflect the share of costs
incurred in Regulated Water and Waste Water that were previously
reallocated to non-household retail operations. As these activities
are not transferring to the JV they are deemed to remain with
Regulated Water and Waste Water for the purpose of this
restatement.
-- Discontinued operations turnover increased by GBP203.2
million and PBITE increased by GBP10.9 million.
Notes:
(1) Discontinued operations previously reported comprise the
Water Purification business that was sold in July 2015.
(2) PBITE = Profit before interest, tax and exceptional
items.
Enquiries
Ruban Chandran Severn Trent Plc 07957 166615
Head of Investor
Relations
Richard Tunnicliffe Severn Trent Plc 07834 419722
Investor Relations
Manager
Appendix
Restatement of P&L for the prior year ended 31 March
2016:
The following P&L summaries are provided to assist the
reader in comparing continued and discontinued operations side by
side.
Ø Group
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household Consol
reported retail Restated reported retail Restated adjs
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 1,786.9 (33.2) 1,753.7 29.7 397.9 427.6 (364.7) 1,816.6
----------- ----------- --------- ----------- ----------- --------- -------- ----------
Profit before
interest tax
and exceptional
items (PBITE) 522.8 (19.4) 503.4 2.1 19.4 21.5 - 524.9
Exceptional
items 1.0 - 1.0 (2.7) - (2.7) - (1.7)
----------- ----------- --------- ----------- ----------- --------- -------- ----------
Profit before
interest and
tax 523.8 (19.4) 504.4 (0.6) 19.4 18.8 - 523.2
Net finance
costs (209.3) - (209.3) - - - - (209.3)
Gains/(losses)
on financial
instruments 7.7 - 7.7 - - - - 7.7
Share of results
of associates
and joint
ventures 0.1 - 0.1 - - - - 0.1
----------- ----------- --------- ----------- ----------- --------- -------- ----------
Profit before
tax 322.3 (19.4) 302.9 (0.6) 19.4 18.8 - 321.7
Taxation 9.7 3.9 13.6 (0.1) (3.9) (4.0) - 9.6
Profit after
tax 332.0 (15.5) 316.5 (0.7) 15.5 14.8 - 331.3
----------- ----------- --------- ----------- ----------- --------- -------- ----------
Turnover from continuing operations is reduced by GBP33.2m
representing the sales of the Severn Trent Water non-household
retail business and of our out of area retail business mainly in
Scotland (GBP397.9m), less the sales from our wholesale business to
our non-household retail business (GBP364.7m).
Turnover from discontinued operations is increased by the sales
from the Severn Trent Water non-household retail operations and the
sales from the out of area retail business.
The sales from the wholesale business to the Severn Trent Water
non-household retail business are included in continuing operations
but eliminated from the total group sales as a consolidation
adjustment.
PBITE from continuing operations is reduced by the PBITE from
both non-household retail businesses. In addition shared retail and
central overhead costs incurred in Regulated Water and Waste Water
that were previously allocated to non-household retail activities,
but which will not be transferred into the joint venture, have been
retained in continuing activities. Further detail is provided in
the segmental analysis below.
Segmental results
Ø Business Services
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household
reported retail Restated reported retail Restated Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 674.6 (397.9) 276.7 29.7 397.9 427.6 704.3
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest tax
and exceptional
items (PBITE) 38.2 (9.8) 28.4 2.1 19.4 21.5 49.9
Exceptional
items - - - (2.7) - (2.7) (2.7)
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest and
tax 38.2 (9.8) 28.4 (0.6) 19.4 18.8 47.2
----------- ----------- --------- ----------- ----------- --------- ------
The reduction in continuing turnover represents the sales from
the Severn Trent Water non-household retail operations and the
sales from the out of area retail business. This is reflected as
increased turnover from discontinued operations.
PBITE from continuing operations is reduced by the PBITE from
both non-household retail businesses.
PBITE from discontinued operations is increased by the amount
previously reported within continuing operations plus GBP9.6
million from shared costs for activities not transferred to the
discontinued operation and are now reported in Regulated Water and
Waste Water.
Ø Regulated Water and Waste Water
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household
reported retail Restated reported retail Restated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 1,506.1 - 1,506.1 - - - 1,506.1
----------- ----------- --------- ----------- ----------- --------- --------
Profit before
interest tax
and exceptional
items (PBITE) 492.1 (9.6) 482.5 - - - 482.5
Exceptional
items 1.0 - 1.0 - - - 1.0
----------- ----------- --------- ----------- ----------- --------- --------
Profit before
interest and
tax 493.1 (9.6) 483.5 - - - 483.5
----------- ----------- --------- ----------- ----------- --------- --------
The reduction in PBITE represents shared costs, previously
allocated to non-household retail, for activities not transferred
to the discontinued operations. These costs include shared retail
activities such as billing and cash collection and an element of
shared central overheads that remain with the continuing
business.
Restatement of P&L for the six months ended 30 September
2015:
The following P&L summaries are provided to assist the
reader in comparing continued and discontinued operations side by
side.
Ø Group
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household Consol
reported retail Restated reported retail Restated adjs
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 896.1 (17.5) 878.6 29.7 203.2 232.9 (185.7) 925.8
----------- ----------- --------- ----------- ----------- --------- -------- --------
Profit before
interest tax
and exceptional
items (PBITE) 281.0 (10.9) 270.1 2.1 10.9 13.0 - 283.1
Exceptional
items - - - (2.7) - (2.7) - (2.7)
----------- ----------- --------- ----------- ----------- --------- -------- --------
Profit before
interest and
tax 281.0 (10.9) 270.1 (0.6) 10.9 10.3 - 280.4
Net finance
costs (106.3) - (106.3) - - - - (106.3)
Gains/(losses)
on financial
instruments 11.5 - 11.5 - - - - 11.5
Share of results
of associates
and joint
ventures - - - - - - - -
----------- ----------- --------- ----------- ----------- --------- -------- --------
Profit before
tax 186.2 (10.9) 175.3 (0.6) 10.9 10.3 - 185.6
Taxation (39.3) 2.2 (37.1) (0.1) (2.2) (2.3) - (39.4)
Profit after
tax 146.9 (8.7) 138.2 (0.7) 8.7 8.0 - 146.2
----------- ----------- --------- ----------- ----------- --------- -------- --------
Turnover from continuing operations is reduced by GBP17.5m
representing the sales of the Severn Trent Water non-household
retail business and of our out of area retail business mainly in
Scotland (GBP203.2m), less the sales from our wholesale business to
our non-household retail business (GBP185.7m).
Turnover from discontinued operations is increased by the sales
from the Severn Trent Water non-household retail operations and the
sales from the out of area retail business.
The sales from the wholesale business to the Severn Trent Water
non-household retail business are included in continuing operations
but eliminated from the total group sales as a consolidation
adjustment.
PBITE from continuing operations is reduced by the PBITE from
both non-household retail businesses. In addition shared retail and
central overhead costs incurred in Regulated Water and Waste Water
that were previously allocated to non-household retail activities,
but which will not be transferred into the joint venture, have been
retained in continuing activities. Further detail is provided in
the segmental analysis below.
Segmental results
Ø Business Services
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household
reported retail Restated reported retail Restated Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 337.3 (203.2) 134.1 29.7 203.2 232.9 367.0
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest tax
and exceptional
items (PBITE) 17.3 (6.1) 11.2 2.1 10.9 13.0 24.2
Exceptional
items - - - (2.7) - (2.7) (2.7)
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest and
tax 17.3 (6.1) 11.2 (0.6) 10.9 10.3 21.5
----------- ----------- --------- ----------- ----------- --------- ------
The reduction in continuing turnover represents the sales from
the Severn Trent Water non-household retail operations and the
sales from the out of area retail business. This is reflected as
increased turnover from discontinued operations.
PBITE from continuing operations is reduced by the PBITE from
both non-household retail businesses.
PBITE from discontinued operations is increased by the amount
previously reported within continuing operations plus GBP4.8
million from shared costs for activities not transferred to the
discontinued operation and are now reported in Regulated Water and
Waste Water.
Ø Regulated Water and Waste Water
Continuing Discontinued Total
----------------------------------- -----------------------------------
Non Non
Previously household Previously household
reported retail Restated reported retail Restated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 754.4 - 754.4 - - - 754.4
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest tax
and exceptional
items (PBITE) 270.2 (4.8) 265.4 - - - 265.4
Exceptional
items - - - - - - -
----------- ----------- --------- ----------- ----------- --------- ------
Profit before
interest and
tax 270.2 (4.8) 265.4 - - - 265.4
----------- ----------- --------- ----------- ----------- --------- ------
The reduction in PBITE represents shared costs, previously
allocated to non-household retail, for activities not transferred
to the discontinued operations. These costs include shared retail
activities such as billing and cash collection and an element of
shared central overheads that remain with the continuing
business.
This information is provided by RNS
The company news service from the London Stock Exchange
END
CIRGLGDCUUGBGLI
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