Severn Trent’s profit falls amid ‘largest ever’ investment in its services
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Severn Trent revenues ticked up 9.7 per cent in the six months to 30th September as the company saw higher revenues from its regulated water and waste water business.
The water group reported revenues of £1.2bn, up from £1.1bn this time last year.
Profit before investment and tax (PBIT) fell from £261.7m to £255.1m, in part as a result of the company’s strategy to spend big on re-investing through this financial year.
Accordingly, capital investment for the period rocketed by 76.8 per cent against the same period last year. According to the group, 2023 will be its “largest ever year of capital investment,” with a total outlay of £1bn planned.
Severn Trent has laid out a seven-year plan to invest £12.9bn between 2025 and 2030.
Looking ahead, the company remains bullish on its full-year guidance and expects adjusted earnings per share growth throughout the period, after issuing 46.5m additional shares in October, raising £1bn to help fund its capital spending plans.
Despite raising £1bn from shareholders, Severn Trent’s net debt rose to £7.5bn at the end of September, up from £6.6bn a year ago.
The company increased its interim dividend per share from 42.7p to 47.7p.
Liv Garfield, Chief Executive, Severn Trent Plc, said: “Our team has delivered for customers with a sector leading performance over the last six months, driven by a £500m investment in the Midlands and we’re hugely excited about the economic, environmental and societal benefits this will bring to the area for decades to come.”
Last week, amongst a host of industry fines, Ofwat said the company will be allowed to add £89m to the bills of its 4.6m customers from next year thanks to improving performance.