Sector movers: Water companies buoyant
The utilities sector is firmer today with water companies featuring prominently. Severn Trent floats higher despite reporting a 6.4% decline in profits in a flood-hit first half, while Kelda gives back a fraction of yesterday's bid inspired gains.
Severn Trent's profit before tax for the six months fell to £149.5m from £159.8m in the same period last year on turnover that rose 3.7% to £774m, mainly due to price increases in Severn Trent Water.
The group said it is continuing to assess the long-term damage to over 150 Waste Water sites due to the flooding in the summer but had no reason to revise its previous estimates of £25m to £35m gross economic cost. Insurance recoveries also remain unchanged at between £10m and £20m.
The capital programme is proceeding according to plan, it said, and added that efficiencies of around 6% over the Ofwat determination continue to be deliverable.
Implementation of its improvement plans is likely to incur around £8m of restructuring costs in the full year 2007/08.
Kelda has slipped back after advancing strongly yesterday when it agreed terms of a recommended offer worth more than £3bn from a consortium that includes banking giant HSBC.
Newly incorporated Saltaire Water, whose other members are Citigroup unit Citi Infrastructure Investors, GIC Special Investments and Infracapital Partners, has offered 1,090p in cash per share plus the right to a 10.65p interim dividend.
Gearbox designer Torotrak is stuck in reverse after it reported lower first-half revenues due to the later timing of engineering programmes and licence income.
Revenue for the first half fell to £500,000 compared with £1.8m seen in the same period last year. As a result, pre-tax losses increased to £2.4m from £1.4m before.
The group said revenues will be weighted significantly towards the second half.
"In view mainly of the higher revenue anticipated in the second half of the current financial year, we expect losses for the full year to reduce markedly," it said.
Top performing sectors so far today
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Oil & Gas Producers 7,931.40 +0.33%
Insurance (non-life) 1,249.00 +0.16%
Food & Drug Retailers 5,337.60 +0.11%
Real Estate 3,449.60 +0.09%
Gas, Water & Multiutilities 4,965.10 +0.08%
Bottom performing sectors so far today
Electronic & Electrical Equipment 1,824.60 -3.15%
Automobiles & Parts 4,659.10 -3.12%
Industrial Engineering 3,276.40 -1.83%
Software & Computer Services 443.90 -1.79%
Tobacco 23,974.80 -1.77%
