In the news on Monday 18th November, it was annnounced that the CEO of BT Openreach’s Liv Garfield is leaving BT to join the Severn Trent, the water utilities company that supplies services in the Midlands.

A lot of overlap between BT and Severn Trent, have both highly regulated business’s (BT Openreach an Severn Trent Water) and non-regulated businesses (BT Global Services and Severn Trent Services), and also they have massive similarities, in the sense they are both infrastructure companies with hard assets, BT has the ducts and fibre, moving information, and Severn Trent has pipes moving water products.

Looking at Severn Trent, it is a massive business.

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10090]

With a market capitalisation of £4350 million (£4.3 Billion), it is a member of the FTSE-100.

The annual report makes interesting reading

[http://www.severntrent.com/upload/pdf/Severn-Trent-Annual-Report-and-accounts-2013.pdf]

The total 2013 dividend was £0.75. On a share price of about £18.24, the dividend yield is over 4%. (not bad in a near zero interest rate climate)
The dividend cost Severn Trent £322 Million.

Capital expenditure on the Severn Trent network of £555 million

Wages for the staff cost £282.9 Million

Carries quite a large debt load, of £4,297 Million (£4.297 Billion) which is relatively easy to bare, when the company has stable cash flows (people paying the water bill).
Interest payments on debt costs Severn Trent £233 million.

The Severn Trent Pension Fund has assets of £1,724 million, but has liabilities of £2,098 million

The biggest shareholders are:

Blackrock Inc owning 9.87%
Newton Investment Management Ltd owning 5.09%
Legal & General Group Plc owning 4.04%

A large scale utility.