Severn Trent Plc, the water supplier to the British city of Birmingham, said fiscal first-half profit rose 33 percent after it charged customers higher prices.
Net income in the six months to Sept. 30 rose to 114.5 million pounds ($135 million), or 32.9 pence a share, from 86.4 million, or 25 pence, a year before, the company said today in a statement. Pretax profit rose 18 percent to 164.4 million pounds. The company also said it named Mike McKeon as finance director.
Severn Trent benefited from a 15 percent increase in its regulated water prices starting April 1. The business accounts for about 82 percent of earnings before interest and taxes. The Birmingham-based company said it will increase its dividend over the first six months of its fiscal year.
``Severn Trent reported good first-half results which where ahead of both consensus and our estimates,'' said Morgan Stanley in a note to clients.
The shares rose 19 pence, or 1.9 percent, to 1,038 pence in London, valuing the company at 3.59 billion pounds. The stock has gained 7.3 percent this year.
``The performance of the water divisions drove this outperformance,'' said Sofia Savvantidou, an analyst at J.P. Morgan in London, in a note. ``The rest of the outperformance appears to be coming from better cost control.''
Severn Trent raised its first-half dividend by 5.2 percent to 19.16 pence a share.
``We intend today's announcement to be seen as a signal of our intention to achieve real dividend growth'' in the new five- year regulatory period, Chairman John Egan said in the statement.
McKeon, 49, will replace Mark Wilson, who will leave Severn Trent after 10 years. The change is effective Dec. 13, the company said. McKeon was finance director of Novar Plc, a building materials company from 2000 to 2005 when the company was acquired.
Wilson is leaving as Chief Executive Colin Matthews, appointed in February, develops a new management team, Severn Trent said in July. Wilson will receive 190,000 pounds in compensation in 2005, according to company data.
First-half sales rose 13 percent to 1.17 billion pounds.
Biffa, the waste-management unit that contributes about 15 percent of overall profit, also benefited from higher prices. The unit, which employs 4,000 in the U.K. and Belgium, controls 11 percent of the U.K. landfill market. British landfill sites are becoming more profitable because the country only has five to six years of landfill capacity left.
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