Business
SVT & UU COMBINE NON-HOUSEHOLD RETAIL BUSINESSES
SVT & UU COMBINE NON-HOUSEHOLD RETAIL BUSINESSES.
About this update from Severn Trent Plc
[{"type":"text","content":"\n \nRNS Number : 5446Q Severn Trent PLC 01 March 2016 \n\nSevern Trent PLC\n7.00am 1 March, 2016\n \nSEVERN TRENT AND UNITED UTILITIES COMBINE \nNON-HOUSEHOLD RETAIL BUSINESSES\n \nSevern Trent is pleased to announce that it has entered into a joint venture agreement with United Utilities (\"UU\") whereby Severn Trent and UU will combine their non-household water and wastewater retail businesses, principally comprising billing and customer service activities, into one business (the \"JV\"), centrally located in Stoke-on-Trent.\nSevern Trent and UU have strong track records in operating and growing successful non-household retail services in Scotland. With the non-household retail market in England opening for competition in 2017, this JV will combine the complementary skills of both companies, including sales, customer service, business strategy and credit management, to deliver an attractive proposition for large and small business customers across England and Scotland. Bringing our businesses together will create a JV with the synergies to provide an efficient and cost-effective operation focussed on improved customer service and growth.\nBased on the accounts of Severn Trent and UU and before allowing for any financing or synergy effects, the JV would have had sales1 of £940.2m, gross assets2 of £200.0m and profit before tax3 of £9.7m for the year ended 31 March 2015.\nThe Chief Executive of the JV will be Sue Amies-King (currently Business Retail Director at UU) and the Chief Financial Officer will be Stuart Howell (currently Head of Finance and Business Planning, Business Services at Severn Trent). \nSevern Trent will pay £3.5 million on completion of the transaction in order to create a 50/50 JV and will share the cost of systems development necessary for the provision of non-household retail services. After completion, Severn Trent and UU will account for the JV, through share of profits of joint ventures, using equity accounting.\nThe Agreement is subject to clearance from the Competition and Markets Authority, which Severn Trent and UU expect to obtain in the Spring.\nLiv Garfield, Severn Trent CEO, said: \"I am delighted to be working with UU in creating this JV. The introduction of competition into the non-household retail market presents us with an excitin...