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(Alliance News) - Severn Trent on Wednesday said it raised GBP250 million in a placing, retail offer and subscription to fund its "green recovery" projects, the same day it reported a fall in profit in the 2021 financial year.
The Coventry-based water utility said a total of 10.1 million shares were placed by Merrill Lynch International and Morgan Stanley & Co International at a price of 2,400 pence each. The price represented a discount of 4.0% to Wednesday's closing price of 2,500p.
Shares were trading 1.4% lower at 2,466.00p in London on Wednesday afternoon.
Concurrently, retail investors subscribed in the offer made on the PrimaryBid platform for a total of 286,344 shares at the same price. Additionally, some board and management members subscribed for 7,290 shares.
Severn Trent first announced the share issue Wednesday morning, and said it will put funds towards environmental projects endorsed by UK regulator Ofwat.
Severn Trent said the cash will go towards six projects costing GBP624 million, including cleaning rivers and replacing customer-owned lead pipes, which were announced on Monday.
The placing will position the company for improved financial performance in the future and benefit all stakeholders including investors, Severn Trent said.
Also on Wednesday, the FTSE 100 constituent said pretax profit dropped 14% to GBP267.2 million from GBP310.7 million in the year ended March 31. Revenue declined 0.9% to GBP1.83 billion from GBP1.84 billion.
The company proposed a final dividend per share of 60.95 pence, bringing the total for financial 2021 to 101.58p. That's up 1.5% from the 100.08p paid out in financial 2020.
Revenue held up better than Severn Trent had expected a year ago, as domestic water consumption made up for the loss of business usage, it said. The company was awarded GBP79 million under UK water regulator Ofwat's performance incentive scheme, an industry record.
But profit was hit by increased labour, power and chemical costs.
By Ivan Edwards; ivanedwards@alliancenews.com
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