Severn Trent PLC is reporting sector-leading operational and environmental performance with the publication of its Annual Results for the year ending 31 March 2024 , saying that long-term investment is continuing to deliver its industry-leading performance.
The company invested £1.2 billion during the period, a 63% increase year-on-year, bringing the total invested this AMP to over £3 billion.The water company said it was “highly confident” it has achieved 4* EPA in 2023, an unprecedented fifth consecutive year of achieving the highest environmental rating.
Severn Trent said it has delivered robust financial performance in the year, in line with expectations. Profit before interest and tax (PBI) of £511.8million (2022/23: £508.8 million) was in line with the previous year; with lower finance costs, due mainly to lower inflation on index-linked debt, profit before tax was 19.9% higher at £201.3 million. Group profit after tax was £140.2 million (2022/23: £132.2 million)
Group turnover was £2,338.2 million (2022/23: £2,165.1 million) up £173.1 million (8.0%), driven mainly by higher revenues in the Regulated Water and Wastewater business (up £156.6 million). Operational cash flow was £760.8 million, (2022/23: £713.1 million).
The company said its balance sheet remains strong - at 31 March 2024 adjusted net debt was £7,187.9 million (2023: £7,123.9 million).
The proposed final dividend of 70.10 pence (2022/23: 64.09 pence),is in line with inflation-linked dividend policy and payable on 17 July 2024.
According to Severn Trent, its ambitious PR24 business plan comprehensively addresses Ofwat's three key tests of financeability, deliverability, and affordability.
The company also conducted a successful £1 billion equity raise, enabling it to accelerate £450 million of AMP8 investment into AMP7.
Strong operational performance
The company is also reporting a strong operational performance, including achieving its lowest ever leakage during the year, meaning it has now reduced leakage on its network by 10.8% in AMP7, and remains on track for a 15% reduction by the end of AMP7. Other highlights include:
- Severn Trent’s Zero Spills Hub is now operational, trialling innovations and creating bespoke plans for each storm overflow as the company aims to halve its usage of overflows by 2030. In addition, it has also insourced around 400 colleagues into its customer Waste Network Team, giving it greater control over performance.
- With the creation of its ODI Centre of Excellence, a newly-assembled team of analytical specialists working alongside operational teams is focused on maintaining its sector-leading record of outperformance into AMP8
- The company’s 'Plug and Play' capabilities and asset delivery catalogue is expanding, and is set to revolutionise its capital programme - saving time as Severn Trent delivers its largest ever programme of investment in AMP8
- The successful migration of over 20,000 customers to Kraken, a world class Customer Information System, will enable it to unlock data from smart meters to drive performance on per capita consumption and leakage, while transforming the billing service for customers
- Severn Trent is also expanding its smart metering programme, rolling out over 400,000 smart meters by the end of AMP7, and more than a million by the end of AMP8. This will allow for more rapid identification of leaks, while also linking into the new customer platform, Kraken.
Commenting on the results<Liv Garfield, Chief Executive, Severn Trent Plc, said:
"I'm proud of the performance our brilliant teams have delivered this year, whether for our customers, the environment or the wider region. We have achieved our best ever leakage performance and we're very confident of keeping the highest 4* status from the Environment Agency for an unprecedented fifth consecutive year. We're also driving innovation across our sector, with new technology at our Strongford treatment works eliminating all of the site's carbon emissions.
"The extra £1bn we raised from our investors will help us continue to transform the network, reducing spills, improving river health and providing our customers with the best and most reliable service. Following extensive work to test and trial solutions, just last week we unveiled plans to deliver storm overflow solutions across 900 locations in the Midlands this year, and a dedicated 300-strong team are now installing c. 1,000 capital schemes which, once finished, will see a reduction of 20% of spills per year.
"We are planning record levels of investment in the coming years, while also keeping bills the second lowest in the country. Our customers and the communities in which they live are at the heart of our business and we're doing more than ever to ensure we have a positive economic, environmental and social impact across our region."
