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UK-headquartered Severn Trent Plc is a water utility company and engaged in the business of providing water and remove wastewater from the UK and Internationally. Its areas of operation are categorised into two segments: Water and Wastewater and Business services.
On May-21-2019, the water utility provider reported its full year financial results for the period ended March 31, 2019. Turnover during the period was improved by 4.2% to £1,767 mn against £71 mn a year ago. Underlying profit before interest and taxes was up by 6.3% to £574 mn and reported PBIT increased by 6.8% to £563 mn.
Total Revenue from regulated water and wastewater segment expanded to £1,637.6 mn from £1574.6 mn a year ago and revenue from the business services surged by £5.4 mn to £146.4 mn against £141 mn reported last year.
Underlying basic earnings per share grew by 21% to 145.8 pence per share, led by a decrease in effective interest rate by 60 bps to 3.9%. However, on a reported basis, basic EPS was up by 31% to 133.4 pence per share. The board of the company has recommended a final dividend of 56.02 pence, which was in line with the management policy. The ex-dividend date is June 13, 2019.
Underlying EBITDA stood at £918.8 mn, and Net finance cost, excluding finance cost from a pension, was £180.4 mn, which reflects that the group's EBITDA interest coverage ratio increased to 5.1x against 4.3x in FY18.
Cash generated from the operation was 6.5% higher at £826.3 mn against £773.3 mn made in FY18.
The water utility group said; we are well equipped for a no-deal Brexit, and this is not going to create a new principle risk for the group. However, Brexit would have some potential to impact some other area of operations like supply chain, funding availability, borrowing costs and some regulatory changes.
The group reported strong operational developments in water in the second half of FY19 and have boosted the confidence for FY19-20 and beyond. The group is on track to surpass 50% renewable energy self-generation target in FY20 and supported by the acquisition of Agrivert UK renewables business.
The group has set a target to achieve net zero carbon and 100% energy from renewable sources by 2030. The group estimated to earn around £25 mn in customer ODIs in FY20.
Stock Performance
Daily price chart (as on May 21, 2019), before the market close. (Source: Thomson Reuters).
At the time of writing (before the market close, 03:26 PM GMT), shares of SVT were quoting at GBX 1,933.0 and added 13.5 points or 0.70% against the previous day closing price level. Shares of the group have touched a 52w high of GBX 2,104 and a 52w low of GBX 1,757.01. The outstanding market capitalisation of the company stood at around £4.6 bn with a dividend yield of 4.65%.
