Shares in Severn Trent were up on the FTSE 100 in morning trading after the utilities company reported a rise in turnover, while pre-tax profit declined significantly in the year ended 31 March.

Turnover declined in the period by 0.4 per cent to £1.7 billion, while pre-tax profit dropped 24.3 per cent to £253 million.

Severn Trent said it would be cutting total ordinary dividends 10 per cent to 65.09 pence per share. However the company said that in 2011/12 it would raise dividends 7.7 per cent to 70.10 pence per share.

Tony Wray, Chief Executive Severn Trent, said, "We have made a good start to our new regulatory period, with planned operational expenditure for the year below the level of the Final Determination. We have delivered on planned outputs and are realising the benefits of efficiency programmes such as the move of 1,300 people into our new operations centre in Coventry."

By 10:55 shares in Severn Trent were up 1.66 per cent on the FTSE 100 to 1,527.00 pence per share.