Price hikes boost Severn Trent profits

Severn Trent is waiting for the industry regulator's report on Thursday

Price rises have offset a fall in consumption in the water company Severn Trent's first half earnings.

Pre-tax profit rose 51% to £208.2m in the six months to the end of September. That is better than many city analysts had forecast.

The company, which supplies more than 3.7 million homes and businesses, said demand was weakening.

Severn Trent also said that it was on target to make £5m in cost savings for this year.

It added that it had "worked hard" to control bad debt levels - which remain at 2.3% of turnover.

On Thursday, the industry regulator Ofwat is expected to rule on how much water companies can increase their prices over the next five years.

Severn Trent chief executive Tony Wray said: "We have fully engaged with Ofwat... we will take the time necessary to analyse the final determination document, which will be detailed and complex."