TIDMSVT
RNS Number : 4348L
Severn Trent PLC
19 July 2017
LEI: 213800RPBXRETY4A4C59
Severn Trent Plc
Trading Update for the period 1 April to 19 July 2017
Severn Trent, one of the leading water and waste water companies
in the UK, today announces a trading update for the period to 19
July 2017.
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 ODI(1) outperformance of
around GBP23 million, whilst also continuing to work towards
delivering totex(2) efficiencies of GBP770m in AMP6(3) . We are
making good progress on our business plan for AMP7(4) , which will
be submitted to Ofwat in September 2018.
On 11 July 2017, Ofwat published its draft methodology
consultation for PR19(5) . 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.
Severn Trent Plc will announce its half-year 2017/18 results for
the period ending 30 September 2017 on 23 November 2017.
Notes
1. ODI = Outcome Delivery Incentive
2. Totex = total expenditure
3. AMP6 = Asset Management Plan 6, the regulatory period for 2015 to 2020
4. AMP7 = Asset Management Plan 7, the regulatory period for 2020 to 2025
5. PR19 = Price Review 2019
Restatement of prior-year results following the reclassification
of operating services activities in the USA and Italy as
discontinued operations
Severn Trent Plc announces the restatement of prior-year results
as a consequence of the reclassification of its Operating Services
activities in the USA and Italy as discontinued operations. These
activities are restated following the sale of the US business
announced on 3 July 2017. For the full financial year to 31 March
2018, the results for the Group will therefore include three months
of discontinued operations for the US Operating Services
business.
The following restatement of 2016/17 half-year and full-year
data is to assist investors and analysts in their financial
modelling of the Group, in advance of the half-year 2017/18
results, which will be announced on 23 November 2017.
Summary restatement
Prior year ended 31 March 2017:
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 1,528.8 309.6 6.2 (25.4) 1,819.2
Operating Services
US and Italy - (181.2) - - (181.2)
Restated 1,528.8 128.4 6.2 (25.4) 1,638.0
------------------------ ----------- ---------- ----------- ------- --------
From discontinued
operations(1)
As previously reported - 66.0 - - 66.0
Operating Services
US and Italy - 181.2 - - 181.2
Restated - 247.2 - - 247.2
------------------------ ----------- ---------- ----------- ------- --------
Profit before interest, tax and exceptional items
(PBITE)(2) :
From continuing
operations
As previously reported 494.7 37.2 (6.0) (0.8) 525.1
Operating Services
US and Italy - (5.0) - - (5.0)
Restated 494.7 32.2 (6.0) (0.8) 520.1
------------------------ ----------- ---------- ----------- ------- --------
From discontinued
operations
As previously reported - (1.3) - - (1.3)
Operating Services
US and Italy - 5.0 - - 5.0
Restated - 3.7 - - 3.7
------------------------ ----------- ---------- ----------- ------- --------
-- Group turnover from continuing operations reduced by GBP181.2
million. Group PBITE from continuing operations is restated by
GBP5.0 million.
-- Business Services turnover from continuing operations reduced
by GBP181.2 million and PBITE from continuing operations is
restated by GBP5.0 million. No other segment was impacted.
-- Discontinued operations turnover increased by GBP181.2
million and PBITE increased by GBP5.0 million.
-- Of the adjustment to turnover of GBP181.2 million, GBP160.5
million relates to Operating Services US and GBP20.7 million to
Italy.
-- Of the adjustment to PBITE of GBP5.0 million, GBP4.4million
relates to Operating Services US and GBP0.6 million to Italy.
Summary restatement
Prior six months ended 30 September 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 765.2 151.0 0.6 (10.0) 906.8
Operating Services
US and Italy - (86.8) - - (86.8)
Restated 765.2 64.2 0.6 (10.0) 820.0
------------------------ ----------- ---------- ----------- ------- -------
From discontinued
operations(1)
As previously reported - 68.8 - - 68.8
Operating Services
US and Italy - 86.8 - - 86.8
Restated - 155.6 - - 155.6
------------------------ ----------- ---------- ----------- ------- -------
Profit before interest tax and exceptional items
(PBITE):
From continuing
operations
As previously reported 268.9 16.1 (4.7) (1.9) 278.4
Operating Services
US and Italy - (2.7) - - (2.7)
Restated 268.9 13.4 (4.7) (1.9) 275.7
------------------------ ----------- ---------- ----------- ------- -------
From discontinued
operations(1)
As previously reported - 2.4 - - 2.4
Operating Services
US and Italy - 2.7 - - 2.7
Restated - 5.1 - - 5.1
------------------------ ----------- ---------- ----------- ------- -------
-- Group turnover from continuing operations reduced by GBP86.8
million. Group PBITE from continuing operations is restated by
GBP2.7 million.
-- Business Services turnover from continuing operations reduced
by GBP86.8 million and PBITE from continuing operations is restated
by GBP2.7 million. No other segment was impacted.
-- Discontinued operations turnover increased by GBP86.8 million
and PBITE increased by GBP2.7 million.
-- Of the adjustment to turnover of GBP86.8 million, GBP74.8
million relates to Operating Services US and GBP12.0 million to
Italy.
-- Of the adjustment to PBITE of GBP2.7 million, GBP2.5 million
relates to Operating Services US and GBP0.2 million to Italy.
Notes
1. Discontinued operations previously reported comprises the
non-household retail business that was sold to Water Plus in June
2016
2. PBITE = Profit Before Interest, Tax and Exceptional items
Enquiries
Ruban Chandran Severn Trent Plc +44 7957 166615
Head of Investor
Relations
Richard Tunnicliffe Severn Trent Plc +44 7834 419722
Investor Relations
Manager
Appendix
Restatement of P&L for the prior year ended 31 March
2017:
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
---------------------------------- ----------------------------------
Operating Operating
Services Services
Previously US and Previously US and
reported Italy Restated reported Italy Restated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 1,819.2 (181.2) 1,638.0 66.0 181.2 247.2 1,885.2
----------- ---------- --------- ----------- ---------- --------- ----------
Profit before
interest tax
and exceptional
items (PBITE) 525.1 (5.0) 520.1 (1.3) 5.0 3.7 523.8
Exceptional
items 18.6 - 18.6 14.6 - 14.6 33.2
----------- ---------- --------- ----------- ---------- --------- ----------
Profit before
interest and
tax 543.7 (5.0) 538.7 13.3 5.0 18.3 557.0
Net finance
costs (204.0) (1.1) (205.1) - 1.1 1.1 (204.0)
Gains/(losses)
on financial
instruments (1.8) - (1.8) - - - (1.8)
Share of results
of associates
and joint
ventures (1.8) - (1.8) - - - (1.8)
----------- ---------- --------- ----------- ---------- --------- ----------
Profit before
tax 336.1 (6.1) 330.0 13.3 6.1 19.4 349.4
Taxation (7.1) 0.6 (6.5) 0.3 (0.6) (0.3) (6.8)
Profit after
tax 329.0 (5.5) 323.5 13.6 5.5 19.1 342.6
----------- ---------- --------- ----------- ---------- --------- ----------
Ø Business Services
Continuing Discontinued Total
---------------------------------- ----------------------------------
Operating Operating
Services Services
Previously US and Previously US and
reported Italy Restated reported Italy Restated Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 309.6 (181.2) 128.4 66.0 181.2 247.2 375.6
----------- ---------- --------- ----------- ---------- --------- ------
Profit before
interest tax
and exceptional
items (PBITE) 37.2 (5.0) 32.2 (1.3) 5.0 3.7 35.9
Exceptional
items 2.6 - 2.6 14.6 - 14.6 17.2
----------- ---------- --------- ----------- ---------- --------- ------
Profit before
interest and
tax 39.8 (5.0) 34.8 13.3 5.0 18.3 53.1
----------- ---------- --------- ----------- ---------- --------- ------
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
---------------------------------- ----------------------------------
Operating Operating
Services Services
Previously US and Previously US and
reported Italy Restated reported Italy Restated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 906.8 (86.8) 820.0 68.8 86.8 155.6 975.6
----------- ---------- --------- ----------- ---------- --------- -------
Profit before
interest tax
and exceptional
items (PBITE) 278.4 (2.7) 275.7 2.4 2.7 5.1 280.8
Exceptional
items 21.0 - 21.0 20.6 - 20.6 41.6
----------- ---------- --------- ----------- ---------- --------- -------
Profit before
interest and
tax 299.4 (2.7) 296.7 23.0 2.7 25.7 322.4
Net finance
costs (98.1) (0.4) (98.5) - 0.4 0.4 (98.1)
Gains/(losses)
on financial
instruments (15.4) - (15.4) - - - (15.4)
Share of results
of associates
and joint
ventures (0.9) - (0.9) - - - (0.9)
----------- ---------- --------- ----------- ---------- --------- -------
Profit before
tax 185.0 (3.1) 181.9 23.0 3.1 26.1 208.0
Taxation 2.9 0.4 3.3 (0.5) (0.4) (0.9) 2.4
Profit after
tax 187.9 (2.7) 185.2 22.5 2.7 25.2 210.4
----------- ---------- --------- ----------- ---------- --------- -------
Ø Business Services
Continuing Discontinued Total
---------------------------------- ----------------------------------
Operating Operating
Services Services
Previously US and Previously US and
reported Italy Restated reported Italy Restated Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover 151.0 (86.8) 64.2 68.8 86.8 155.6 219.8
----------- ---------- --------- ----------- ---------- --------- ------
Profit before
interest tax
and exceptional
items (PBITE) 16.1 (2.7) 13.4 2.4 2.7 5.1 18.5
Exceptional
items 0.6 - 0.6 20.6 - 20.6 21.2
----------- ---------- --------- ----------- ---------- --------- ------
Profit before
interest and
tax 16.7 (2.7) 14.0 23.0 2.7 25.7 39.7
----------- ---------- --------- ----------- ---------- --------- ------
Investor timetable
Dividend payment date (Final) 21 July 2017
------------------------------------ -----------------
Half-year results announcement 23 November 2017
2017/18
------------------------------------ -----------------
Ex-dividend date (Interim) 30 November 2017
------------------------------------ -----------------
Record date (Interim) 1 December 2017
------------------------------------ -----------------
Dividend payment date (Interim) 5 January 2018
------------------------------------ -----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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