The cost of last summer's floods to Midlands water company Severn Trent is to be around £13 million to £17 million, Severn said today in a trading statement.

England and Wales's second biggest water company said the costs occurred after insurance recoveries of £16 million.

The financial impact of the floods, the worst in Britain for about 60 years, is considerably lower than Severn Trent had first indicated. Earlier it had estimated £25 to £35 million, before £10 to 20 million of insurance.

News of the flood costs came in a trading statement in which the water company said that pre-tax profits for 2008 would be between 10 per cent and 12 per cent higher than the 2006-2007 figure of £412 million.

The company added that it was on track to meet Ofwat regulatory targets for operating costs and pipe leakage full-year 2007-2008.

Severn Trent's statement made no mention of charges being brought by the Serious Fraud Office or any further action from Ofwat.

The company is expected to be in court this month for a brief hearing over accusations that it lied to industry regulators about leakage figures to justify price rises.

Ofwat, the water regulator has been looking into alleged mis-statement by the water company and has already demanded that Severn Trent return £42 million to 3.2 million customers. The regulator called in the Serious Fraud Office which will now begin a formal prosecution of the company, marking the first time any utility company has been charged with such a crime.

After the formal prosecution is completed, Severn Trent is expected to face another round of action by Ofwat.