Severn Trent has risen after full year profits at the group rose to £338.5m.

The utilities group said that profits rose after efficiency savings were introduced - as revenue increased just 4 pct on inflation.

Underlying pre-tax profits beat expectations to rise 24 per cent to £338.5 million as turnover rose 3.8 per cent to £1.7 billion.

Sir John Egan, Chairman Severn Trent Plc, said:

"Building on our track record of continuous improvement, I am pleased to be able to report today growth of 23.7% in underlying group PBT, achieved through our focus on delivering further improvements in efficiency, processes and standards."

"During my tenure as Chairman, Severn Trent has successfully dealt with a number of challenges and transformed itself into a company with a clear focus on water, and on delivering improved performance year after year." he added.

Full year dividend was up 7.4 pct ahead of inflation.

Tony Wray, Chief Executive Severn Trent Plc, said:

"These results demonstrate that we continue to deliver on our plans, focusing on raising standards, process
and efficiency improvements, delivering the lowest possible bills for customers, developing our people and
growing shareholder value. Severn Trent Water has delivered an improved operational performance. We were pleased to receive the maximum score for our customer service in Ofwat's most recent assessment."

Tina Cook, analyst with Charles Stanley has an 'accumulate' rating on the company.

"Investors concerned about higher inflation are likely to find watercos increasingly attractive." said analyst Tina Cook.