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City File: Severn Trent

Saturday 12 June 1993 23:02 BST
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ANOTHER cluster of water companies report this week, among them Severn Trent - by far the most acquisitive of the water utilities. In 1991 it bought Biffa, the waste disposal business, for pounds 214m, but operating profits have yet to cover the cost of the deal. However, Robert Miller-Bakewell of NatWest Securities believes the tide is turning and Biffa will go into the black in the next two or three years. Severn Trent's performance in its core business is relatively strong, in a sector overshadowed by the regulatory review to be completed next year, but it is unlikely to make another flood of acquisitions until Biffa has been sorted out. In the meantime, it should turn in flat or slightly increased profits and a full-year net dividend of 21p.

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