Severn Trent profits tumble despite rise in revenues

water tap
Image caption Severn Trent said it was making good progress despite difficult market conditions

Severn Trent's profits have halved despite a rise in revenues, as the water firm faced a series of charges.

Half-year pre-tax profits at the firm, which serves eight million customers, have fallen from £208.2m to £101.1m.

Without the charges profits fell 16%. The firm said extra costs for restructuring and infrastructure spending had held back profits.

Severn Trent said trading conditions were challenging and it was nearing the end of a major period of change.

Severn Trent's revenues rose 1.9% to £867.9m for the six months to the end of September.

The company cut its interim dividend by 2.5% to 26.04p, and introduced a new dividend policy for the period between 2011-12 and 2014-15.

"The board has decided that the dividend policy for Severn Trent for the period should be RPI plus 3%," the company said in a statement.

Tony Wray, chief executive, said: "We have continued to raise standards and drive greater efficiency across the business, with good progress in many key areas including further improvements in customer service, sewer flooding and leakage."

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