Severn Trent sees leakages rise in cold snap

The group, which supplies water to customers in South Yorkshire and the Humber, said the recent extreme weather had hit operations, with the prolonged period of freezing temperatures hindering its capital programme.

For the full year 2010/11, the group now expects net capital expenditure to be in the range of 400m to 410m, assuming temperatures remain closer to average levels for the remainder of the winter.

Severn Trent Water said leakages were above the norm due to long periods of freezing temperatures followed by a thaw.

The group said it is working to bring leakage rates back down as rapidly as possible and treated water storage levels are now back to normal.

It added that it is too early to evaluate the impact on annual leakage performance, which will be assessed after the March year end.

But it said the additional cost of repairing these leaks is not material in the context of total current annual operating expenditure.

The group said operating expenditure continues to be in line with the board's expectations for the year. Water consumption levels in the second half will be similar with levels seen last year.

Group exceptional charges of around 20m to 25m are expected for the full year.

Bad debt is expected to remain at around 2.3 per cent of turnover for the full year, assuming no significant deterioration in the UK economy.

Severn Trent will announce its preliminary results for the year to the end of March on May 27.