Companies roundup: Water stocks & Barratt Redrow

The water regulator has been brought around to the water companies’ arguments about leaking infrastructure and spending constraints holding back permanent solutions to constant sewage dumping into waterways.

Ofwat has increased the average bill increase between last year and 2030 from £94 at the draft stage to £157, taking the average English and Welsh water bill to £597 a year. Ofwat has also boosted the allowed rate of return from 3.72 per cent to 4.03 per cent, taking account of “current market conditions including recent increases in the cost of finance”. 

Ofwat boss David Black said the pricing determination would allow a combined £104bn of capital spending, which the companies can use to “turn around their environmental record and improve services to customers”. 

Listed water company shares rose on the final determination announcement, with Pennon (PNN) and Severn Trent (SVT) up almost 2 per cent. United Utilities shares rose 1 per cent. These companies will be permitted to raise bills by close to what they asked for, with Severn Trent bringing in the highest increase at 47 per cent. Southern Water had pushed for the highest increase, from £420 a year to £768, but Ofwat capped the average at £642. AH

Barratt Redrow gives an update on the combined entity

Barratt Redrow (BTRW) has given investors a first look at the size and shape of the new company before it reports its interim results on 12 February. 

Full year revenue for the combined entity stood at £5.8bn, with profit before tax coming in at £355mn. Including land creditors, the company had net cash of £456mn. 

Barratt Redrow is operating from a total of 453 sales outlets, compared to 478 at the end of the half year to 31 December 2023. Private home completions totalled 13,500 while affordable home completions totalled 4,224. NV