Business
United Utilities and Severn Trent joint venture
United Utilities and Severn Trent joint venture.
About this update from United Utilities Group Plc
[{"type":"text","content":"\n \nRNS Number : 5447Q United Utilities Group PLC 01 March 2016 \n\n\nUnited Utilities Group PLC\n1 March 2016\n \nUNITED UTILITIES AND SEVERN TRENT COMBINE\nNON-HOUSEHOLD RETAIL BUSINESSES\n \nUnited Utilities (\"UU\") is pleased to announce that it has entered into a joint venture agreement with Severn Trent, whereby UU and Severn Trent 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.\n \nUU and Severn Trent 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.\n \nBased on the accounts of UU and Severn Trent 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.\n \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). \n \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, UU and Severn Trent will account for the JV, through share of profits of joint ventures, using equity accounting.\n \nThe agreement is subject to clearance from the Competition and Markets Authority, which UU and Severn Trent expect to obtain in the Spring.\n \nSteve Mogford, UU CEO, said: \"We have been an early mover in building a strong non-household retail capability and have already established a sizeable presence in Scotlan...