Member Info for jange

Positive Points: In the present low interest rate environment, a progressive dividend policy remains attractive to shareholders. In line with group policy of growth of Retail Price Index (RPI) +3%, the dividend for 2013/14 is set to be 80.40 pence, representing growth of 6% year on year, and forecast a total payout for 2014/15 of 84.9 pence per share. Management reported "constructive engagement" with Ofwat on its 2015-2020 business plan. The company said it remains on track to deliver its leakage reduction target during the current regulatory period. Last year, management rejected a hostile approach led by Borealis Infrastructure Management Inc noting that "it completely fails to recognise the existing and potential value of Severn Trent." The group's defensive nature provides investor attraction when set against an uncertain economic backdrop.

Negative Points: Profitability from Severn Trent's core water business is dependent on the group's ability to meet a complex regulatory landscape and efficiency targets. The next regulatory period runs between 2015 and 2020. The group's non-regulated business registered impairment costs of £24.7 million due to "continuing customer project and delivery delays across a number of markets." Operationally, regulatory penalties may be incurred if Ofwat performance targets are not achieved. Management continues to monitor developments such as unemployment levels and changes to the UK benefits system in relation to customer bad debts. An eventual increase in interest rates may reduce the appeal of the group's dividend payment, a key investor attraction.

Financial Highlights: Severn Trent unveiled a better-than-expected 7% rise in underlying profits to £269.1 million. Overall group turnover edged 1.4% higher to £1.86 billion. The group's regulated water supply business posted a 4% rise in underlying pre-tax profit of £518.6 million. The firm recorded an impairment of £24.7 million in its services business after what it called a "disappointing" performance.

Full year results: Severn Trent saw its full-year underlying profit climb 7% to 269.1 million pounds, while the group's turnover inched 1.4% higher to 1.86 billion pounds. The company reiterated it was paying a dividend of 80.4 pence per share for the year ended 31 March, a 6 % rise year-on-year, and forecast a total payout for 2014/15 of 84.9 pence per share. Chief Executive Liv Garfield, who recently joined Severn Trent from BT Group, said her focus over the coming 12 months would be trying to secure a good outcome from the regulator's pricing review and to speed up decision-making within the company. The company added "We are continuing our constructive engagement with Ofwat on our 2015-2020 business plan and as previously announced, in order to give sufficient time and opportunity to fully engage with Ofwat, we will submit our revised business plan on 27 June, with a draft determination expected on 29 August, and a final determination expected 12 December. Following the final determination we will be able to elaborate on our dividend policy for 2015-2020". Elsewhere, Severn Trent's regulated water supply business posted a 4% rise in underlying pre-tax profit of £518.6 million, however the firm recorded an impairment of £24.7 million in its services business after what it called a "disappointing" performance. Based on the combined estimates of analysts that cover the company,

Positive Points: Speciality Food Ingredients unveiled a 4% improvement in sales to £983 million, division driven by strong volume growth in emerging markets and Europe. The company reported it had received Board approval for a capital investment of £100 million over the next two years in Speciality Food Ingredients to expand capacity for existing and pipeline products. The company is considered to be well positioned to benefit from the increasing focus by consumers and governments to healthier lifestyles which is driving food and beverage companies to develop healthier alternatives and increasing demand for ingredients in the health sector. The group's strategy is to become the leading global provider of Speciality Food Ingredients. The group reduced its net debt in the year to £353 million, down from £479 million a year earlier. Tate and Lyle is currently pursuing a progressive dividend policy. The full year dividend payment was increased by 5.3%.

Negative Points: The group's Bulk Ingredient division saw a 5% drop in profits to £172 million, held back by a soft beverage season in the US, and an unusually cold and prolonged winter in the US. Splenda sweetener is one of the company's bestselling brands, and earnings growth prospects deteriorated for Tate & Lyle over the course of the year as weak drink sales in the US and a competitive sucralose market weighed on profits. For the new financial year which started in April, Tate & Lyle said group performance should be "slightly lower" than the previous year, before the impact of currency movements. Competition across the group's markets remains intense.

Financial Highlights: Tate & Lyle posted a profit before tax of £290 million, down from £301 million a year earlier. Total sales dipped 3% to £3.1 billion. The board has proposed a final dividend of 19.8 pence a share making a total dividend of 27.6 pence, up 5.3% on the prior year. A reduction in net debt of £126 million to £353 million (2013 - £479 million) was reported.

Full year results: Food ingredient producer Tate & Lyle reported a drop in profits, hurt by a fall in price for its sucralose sweetener, and a weaker appetite for soft drinks in the United States. Earlier in the year, the company warned that it expected flat full-year results following a disappointing third quarter that led Tate & Lyle to cut its forecast. The company's share price plummeted on the news. The group posted a 4% sales rise in its Speciality Food Ingredients division, driven by strong volume growth in emerging markets and Europe, which it said is being partially offset by the a competitive US market. However its Bulk Ingredient division saw a drop in profits, again held back by a soft beverage season in the US, which it said reduced demand for liquid corn sweeteners which is used in cereals, baking and soft drinks. "In Bulk Ingredients, we now anticipate a slower start in the US in our first quarter associated with the prolonged and severe winter, combined with lower European sugar prices in our second half, to outweigh a better performance across other product categories" the company added. "While we will continue to face sucralose pricing headwinds in the current year, our strong innovation pipeline, robust balance sheet and continued growth in emerging markets means we are well placed to deliver growth over the longer term," said Chief Executive Javed Ahmed in a statement

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Halma: UBS ups target price from 600p to 620p maintaining a neutral rating.

Foxtons: Credit Suisse shifts target price from 429.87p to 430p and retains an outperform rating.

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De La Rue: Numis downgrades from add to hold with a target price of 845p.

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Betfair: Numis reduces target price from 1300p to 1150p and keeps an add rating.

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