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Southern boosts dividend by 9.2%

Heather Connon
Thursday 17 June 1993 18:02 EDT
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SOUTHERN WATER, one of the most conservative water companies, yesterday boosted its dividend by 9.2 per cent to 21.3p on the back of a 3.6 per cent rise in pre-tax profits, writes Heather Connon.

William Courtney, chairman, said the increase in profits to pounds 119.2m was evidence of 'good solid progress' which had helped it boost earnings per share by 43 per cent in the three years since privatisation. Last year, earnings were 66.3p, up from 64.2p last time. The dividend was 21.3p (19.5p) via a 14.2p final.

Unlike rivals such as Severn Trent, Southern has only small interests outside the core water business. Trading profit from the unregulated areas - including engineering design, waste management and property - rose from pounds 7m to pounds 8.4m, or 7 per cent of the total, on sales of pounds 77m. Only 26 per cent of these sales were to outside customers, the remainder going to other parts of Southern.

The group has recently established a joint venture with Mediwaste, a New Zealand waste management business, which will incinerate clinical waste. It has already won the contract for King's College Hospital in London.

The water business increased profits by 12 per cent to pounds 111m while pounds 122m was spent on capital projects. Despite that, Southern ended the year with pounds 15.5m cash, up from pounds 1.7m last time. The previous year's results were buoyed by a pounds 6m profit on share dealing.

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