Severn Trent trading as expected

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The country's second biggest water utility, based in Birmingham, raised the annual charge for its 4 million household and business customers by 6.6 percent in April.

"The board considers that overall the Group has delivered first half year performance that is broadly consistent with its expectations for the full year," it said in a statement ahead of the announcement of interim results on December 7.

Severn Trent said the cost of a recent arrangement with Britain's water regulator Ofwat would cut first half sales and profit before interest and tax by around 3.2 million pounds, or by 6.3 million pounds in the full year.

It said this amount would be handed back to customers during the current financial year.

Ofwat told the company in June that it planned to fine it after it failed to meet its legal obligations over customer service standards. The regulator has fined the company already this year for overcharging its customers.

Severn second only to Thames Water in an official league table of the country's worst offenders for leaks also said that dealings in its newly demerged waste management division, Biffa, are expected to start on October 9.

A special dividend of 165p per share worth 576 million pounds will be handed back to investors once Biffa is spun off.

Severn said last month that it was selling its U.S. analytical environmental testing firm Severn Trent Laboratories (STL) to TestAmerica Holdings for 85 million pounds.

The company sparked outrage earlier this year when it reported bumper annual profits and promised investors bigger annual payouts and bonus cash.

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