Severn Trent Share Discussion Threads

[pamelajane] 31/10/2014 08:39

Have taken a short position. Good company and nice dividend, but just hoping to play the range as can't get above 2000p and always struggles towards the end of the year x

[paa65] 10/10/2014 09:28

Severn Trent announced this morning they are merging their water and sewerage operations and shedding 500 management jobs

[freddie ferret] 09/10/2014 15:28

Very big rise today. WHY??

[skinny] 29/5/2014 09:29

Highlights

● In-line or below inflation bill increases for last four years - Severn Trent remains lowest average combined bill in England and Wales

● Increased investment - £602 million capital expenditure (+8% year on year) - continues to improve services for the benefit of customers

● Customer service, sewer flooding and supply interruptions all improving

○ Improved or stable performance on 10 out of 14 Ofwat KPIs year on year

○ Customer satisfaction (SIM score) improved for 3rd consecutive year

● Continued growth in RCV1,2 from £7,364 million to £7,618 million (+3.4%)

● Group underlying PBIT rose 4.3% year on year

○ Severn Trent Water underlying PBIT rose 4.0%

● Delivering on dividend policy - 6.0% growth year on year to 80.40 pence

● Constructive engagement with Ofwat on 2015-2020 business plan. Revised plan submission 27 June, draft determination expected 29 August, final determination expected 12 December

[miata] 23/5/2014 12:46

23 May 2014 Severn Trent PLC SVT Goldman Sachs Buy 1,927.00 1,941.00 - 2,122.00

[tradermichael] 24/2/2014 09:47

Very healthy rises lately - any rumours of a bid here?

[tradermichael] 15/2/2014 13:47

Severn Trent Plc Interim Management Statement

for the period 1 October 2013 to 13 February 2014

The Board of Severn Trent Plc confirms that the group's trading performance overall remains in line with its expectations and prior guidance.

Regulated business

Consumption across our measured income base is expected to be slightly higher year on year, given current volumes.

Our forecasted bad debt level is maintained at around 2.2% of turnover for the full year, and we continue to monitor developments such as unemployment levels and changes to the UK benefits system closely.

Operating expenditure continues to be in line with the Board's expectations for the year and, on a like for like basis, in line with the level of the Final Determination. Operating costs are expected to rise year on year due to the impact of inflation and power costs, partially offset by efficiency improvements. We currently anticipate no material financial impact from the present floods.

Net capital expenditure (UK GAAP after deducting grants and contributions) is expected to be towards the low end of the GBP600 million to GBP620 million range, including an estimated GBP15 million related to private drains and sewers. The level of net infrastructure renewals expenditure included in this range is anticipated to be GBP135 million to GBP145 million.

On 2 December 2013 Severn Trent Water submitted its business plan for 2015-2020 to Ofwat. On 19 December 2013, Ofwat published a revised price review process and timetable. Ofwat subsequently published guidance on risk and reward on 27 January 2014. We await further announcements from Ofwat on plan ratings, starting on March 10 2014.

Non-regulated business

Operating Services continues to perform well year on year, but in Products shipments have been below expectations in the last two months due to continuing customer project and delivery delays. Therefore for the full year Severn Trent Services underlying PBIT is now expected to be lower year on year.

Group

The group interest charge is expected to be higher year on year due to higher net debt and with the adoption of revisions to IAS19 increasing the pension accounting interest charge. The year on year impact of this revision to IAS19 is estimated at GBP13m.

The effective current tax rate for the group for 2013/14 is expected to be between 21% and 23%.

Under our dividend policy of RPI+3% growth the dividend for 2013/14 is set to be 80.40 pence, representing growth of 6% year on year.

Severn Trent Plc will announce its Preliminary results for the financial year ending 31 March 2014 on 29 May 2014.

[miata] 28/1/2014 18:10

The gain follows the proposal from the industry regulator, Ofwat, that the weighed average cost of capital be towards the upper end of its pre-qualification guidance. Ofwat proposed a WACC across the industry of 3.85%. Although this is lower than the 5.1% previously allowed, it is more than many had expected given political pressure to restrict utility company profits.

[careful] 28/1/2014 12:03

they need to encourage the water companies to invest.
creates good jobs, grows the economy, improves infrastructure.

the settlement fears ate always overblown.

[tradermichael] 28/1/2014 12:00

Nice continued upward movement.

Yesterday, Severn Trent up 1.5%. The gain follows the proposal from the industry regulator, Ofwat, that the weighed average cost of capital be towards the upper end of its pre-qualification guidance. Ofwat proposed a WACC across the industry of 3.85%. Although this is lower than the 5.1% previously allowed, it is more than many had expected given political pressure to restrict utility company profits.

What do you think, MIATA?

[arja] 10/1/2014 11:14

gor quite close to 1600 chart support but hard to be sure it has bottomed !

[miata] 07/1/2014 11:52

JPM

We believe that Ofwat's decision to alter the price review timetable and
announce the key financial parameters on January 27th is likely to herald a
lower allowed WACC than the companies requested in their business plans.
We have reduced our vanilla WACC assumptions for the next regulatory
review period from 4.2% to 3.9%. We also see M&A this year as unlikely
given the degree of regulatory risk, with Ofwat's final determinations not due
until December 2014. We reduce our SVT price target by 8.6% to 1,535p;
downgrade our recommendation to Underweight and add it to the European
Analyst Focus list (AFL) replacing Snam.

Ofwat to publish key financial parameters on 27th January. On 19th
December 2013, the UK water regulator (Ofwat) announced that it had
changed the price review timetable. It will now publish its views on key
financial metrics such as the cost of capital and retail margins on 27 January
2014. Ofwat's rationale for the change was that "companies' views on risk
and reward...are not in alignment with market evidence".

Reducing our wholesale WACC assumption to 3.9%. Ofwat's Chief
Regulation Officer, Sonia Brown, stated in a presentation on 13 November
2013 that the "cost of capital will fall...there is a real opportunity for this
number to start with a 3." We therefore lower our wholesale vanilla WACC
assumption from 4.2% to 3.9%, this compares to 5.1% in the current
regulatory period.

We see M&A as unlikely until the regulatory review completes. In our
view, given the uncertainty over allowed returns, M&A is unlikely until
Ofwat publishes its final determination in December 2014. We have
therefore excluded any M&A premia from our price targets for all three
quoted water companies.

Update estimates for lower inflation and deferred price increases. We
have updated our earnings forecasts to take account of: lower UK inflation
and the deferral of allowed price increases in 2014/15 by Pennon and United
Utilities. UU will take this deferral as an exceptional item, so the EPS
impact is minimal. In Pennon's case we have reduced our March 15e EPS by
10%.

Reduce SVT price target by 8.6% to 1,535p and downgrade to
Underweight. We reduce our SVT price target from 1,680p to 1,535p,
which is 10% downside from the current share price and downgrade our
recommendation to Underweight. We retain our Overweight
recommendation for PNN and our Neutral recommendation for UU,
although we have reduced our price targets for both companies by 6.0% and
1.7% respectively to 700p and 735p.

[whum] 07/1/2014 09:44

takeover time???

[ashbox] 07/1/2014 09:35

07 Jan 14 Severn Trent PLC JP Morgan Cazenove Underweight 1,664 1,680.00 1,535.00 Downgrades

[arja] 03/1/2014 10:18

interesting looking chart and more upside I think !

[tradermichael] 04/12/2013 08:07

Yes ...... ;o)

[miata] 03/12/2013 20:18

XD 32.16p.

[miata] 03/12/2013 13:25

SVT
Year End Revenue(£m) Pre-tax(£m) EPS P/E PEG EPS Grth. Div Yield
31-Mar-14 1,875.54 262.73 84.87p 20.5 n/a -14% 80.38p 4.6%
31-Mar-15 1,919.48 272.28 89.01p 19.6 4.0 +5% 84.98p 4.8%

PNN
Year End Revenue(£m) Pre-tax(£m) EPS P/E PEG EPS Grth. Div Yield
31-Mar-14 1,250.47 199.35 39.27p 16.3 n/a -8% 30.36p 4.7%
31-Mar-15 1,354.90 214.93 42.51p 15.0 1.8 +8% 32.46p 5.0%

SVT
Date Broker name New Price Old price target New price target
03-Dec-13 Deutsche Hold 1,714.00p 1,550.00p 1,550.00p
27-Nov-13 Goldman Sachs Buy 1,746.00p 2,113.00p 2,110.00p
25-Nov-13 Credit Suisse Neutral 1,785.00p 1,580.00p 1,580.00p
22-Nov-13 Citigroup Neutral 1,812.00p 1,750.00p 1,750.00p
20-Nov-13 Deutsche Hold 1,830.00p 1,550.00p 1,550.00p
11-Nov-13 Citigroup Neutral 1,798.00p 1,750.00p 1,750.00p
07-Nov-13 Deutsche Hold 1,750.00p 1,550.00p 1,550.00p

PNN
Date Broker name New Price Old price target New price target
02-Dec-13 Goldman Sachs Neutral 639.50p 726.00p 719.00p
29-Nov-13 Deutsche Hold 645.00p 650.00p 650.00p
26-Nov-13 JP Morgan Cazenove Overweight 632.50p 745.00p 745.00p
25-Nov-13 Credit Suisse Underperform 636.50p 610.00p 610.00p
22-Nov-13 Citigroup Buy 638.00p 780.00p 780.00p
20-Nov-13 Deutsche Hold 648.50p 650.00p 650.00p
11-Nov-13 Citigroup Buy 649.00p 780.00p 780.00p
08-Nov-13 HSBC Overweight 649.00p 760.00p 740.00p
07-Nov-13 Deutsche Hold 645.00p 650.00p 650.00p

PNN thread

[essentialinvestor] 03/12/2013 12:31

We agree on the valuation of this one careful, PNN would be my choice.

[careful] 03/12/2013 12:15

that offer was one of these leveraged buyout scams.
they load the company wtih debt to reduce profit.
take cash out and destroy compnies.
financial alchemi.
should be illegal.

svt is fully valued.

[whum] 03/12/2013 12:02

given they rejected an offer of £22/share
surely another offer must come sometime soon

[tradermichael] 28/11/2013 12:39

Yes, but the price could look weak when SVT loses 32p next week (xd)

[miata] 27/11/2013 08:52

United Utilities added 10p at 667p on reporting that H1 pretax profit rose to £335m, from £139.4m. Revenue was £853.3m, from £822.9m. It proposed an interim dividend of 12.01p a share, up from 11.44p. Peer Severn Trent gained 7p at 1,768p on the read across.

[miata] 26/11/2013 16:08

Turnover edged up from £918m to £922m while underlying operating profit at Severn Trent, which has 14.2m customers, rose slightly to £267m. Profits were hit by slightly higher finance charges that rose from £155m to £164m as the company ended the period with net debt of £4.3bn.
Underlying profits before tax and exceptional times fell from £150m to £141m. However, the value of financial instruments held by the company swung from a loss of £38m to a profit of £61m, pushing up pre-tax profits from £113m to £191m for the six months.

SVT confirmed a 6 per cent rise in its interim dividend to 32.16p, in line with its policy of increasing its payout by 3 per cent above of the rate of inflation.

Severn Trent raised prices by 2 per cent – below the rate of inflation – during the six-month interim period to September 30. It is also due to impose average price increases below the retail price index, as measured in November, from next April under the terms of its current five-year settlement with Ofwat.

26 Nov 2013 Severn Trent PLC SVT RBC Capital Markets Underperform 1,758.00 1,785.00 1,580.00 1,580.00

26 Nov 2013 Pennon Group PLC PNN RBC Capital Markets Sector Performer 633.25 636.50 650.00 650.00