(Reuters) - British water supplier Severn Trent SVT.L said on Wednesday it would pay a final dividend, while warning the coronavirus crisis was likely to lead to unpaid household water bills over the next year and a decline in sales to businesses.
The company, one of Britain’s largest water firms, proposed a final dividend of 60.05 pence, in line with policy and higher than the 56.02 pence it paid last year.
Severn recorded a bad debt charge of 42.5 million pounds ($51.96 million), including 2.2 million pounds related to the pandemic, for the year ended March 31.
“We do expect to see an increase in related bad debt from higher unemployment and stressed household finances .... and expect to see further COVID-19 related increases to our bad debt in future periods,” the company said.
The company's Water Plus joint venture with United Utilities UU.L, which supplies to businesses, was affected by lockdowns in place to contain the virus spread.
The British utility recorded an exceptional loss of 46.8 million pounds related to Water Plus for the year.
Severn reported a 0.6% fall in underlying profit before interest and tax for the year as it deferred some net outperformance incentives to the next price period and increased bad debt provisions.
The company said it had 755 million pounds of undrawn credit facilities as at March-end and a further 200 million pounds which was raised from a U.S. private placement.
The FTSE 100-listed firm’s shares were up 1.1% at 2,431 pence.
($1 = 0.8179 pounds)
Reporting by Aby Jose Koilparambil and Shanima A in Bengaluru; Editing by Patrick Graham and Shounak Dasgupta
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