Sector movers: Soap and water
With equities backtracking rapidly today, the safe and steady appeal of utilities company is luring investors.
Even Severn Trent is on the up after water regulator Ofwat proposed to fine it £35.8m for deliberately providing false information and providing poor service to its customers.
The water utility is also to plead guilty to two separate fraud offences relating to leakage data supplied to the regulator in 2001 and 2002.
The pleas will be entered today at the City of London Magistrates' Court. A third charge relating to data supplied in 2000 will not be pursued by the Serious Fraud Office (SFO).
Ofwat's £35.8m fine amounts to about 3% of Severn Trent's turnover and has been broken down into two parts. The water utility will have to pay £34.7m for deliberately misreporting some key customer service information and £1.1m for providing sub-standard services to customers by failing to meet guaranteed standards of service.
The entire fine must be paid by the company and its shareholders, and cannot be passed on to its customers.
"Severn Trent Water's behaviour was unacceptable. The size of the proposed fine reflects how seriously Ofwat takes the deliberate misreporting of information," said Ofwat's chief executive Regina Finn.
"This sends a clear message to the company and to the rest of the water sector - Ofwat will protect consumers and companies must comply with their legal obligations or pay the price. Any further attempts to deliberately mislead Ofwat could lead to even bigger fines in the future," she added.
Severn Trent said in a statement that it "fully acknowledges and accepts that the company is responsible for its failures".
"Now that we have received the notices from Ofwat setting out the proposed level of penalties and the reasons for them, we will carefully consider them and will respond appropriately," said chief executive Tony Wray.
Soap maker PZ Cussons said the outlook for the full year remains positive and in line with expectations despite continued increases in commodity costs.
The group said it is able to mitigate these additional costs by increasing selling prices and improving margins.
It said results between January 30th and April 7th have been in line with management expectations.
Revenue and profitability growth in UK and Nigeria continue to be strong, while trading in Indonesia was in line with plan.
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In Australia, despite a continuing competitive market, cost reduction initiatives are contributing to improvement in results in the second half.
"The financial position of the company remains strong with cash generation during the period in line with expectations," said the group.
Top performing sectors so far today
Fixed Line Telecommunications 3,009.40 +1.18%
Food Producers & Processors 4,552.40 +0.97%
Oil & Gas Producers 7,740.10 +0.31%
Beverages 6,773.00 +0.25%
Gas, Water & Multiutilities 4,602.50 +0.25%
Bottom performing sectors so far today
Technology Hardware & Equipment 206.80 -3.32%
Forestry & Paper 4,343.60 -2.83%
General Retailers 1,568.20 -2.40%
Personal Goods 7,417.00 -2.38%
Mining 25,191.20 -2.24%
