Severn Trent shares strong growth with shareholders
Midland utility Severn Trent has seen continued growth with group turnover rising almost 4% to £1,819m – an increase of £66m.
Group underlying pre-tax profit grew 4.3% to £525m, an increase of £22m. Reported pre-tax profit was up 7.8% to £544m, up £39m.
Liv Garfield, chief executive, Severn Trent, said: “Strong operational delivery resulted in net customer ODIs (Outcome Delivery Incentives) of £47.6m, alongside which we are helping more than 50,000 vulnerable customers.
“New digital technology and improved processes are key building blocks in driving our ambition to be upper quartile versus our peers. We are improving our efficiency and have identified a further £100m totex (total expenditure) savings this regulatory period, taking total efficiencies to £770m.
“We are delivering both strong customer-focused and financial outperformance this regulatory period, and we feel it is now appropriate to share this with our investors. The board is therefore pleased to announce an upgrade to our ordinary dividend policy, to growth of at least RPI +4%.”
Underlying basic earnings per share rose 20% to 122.4p, with reported basic EPS from continuing operations up 5% to 140.1p.
The group has proposed a final dividend of 48.90p, taking the 2016/17 dividend to 81.50p.
She said the group had been able to deliver significant improvements in areas such as sewer floodings, which were down 21%, and supply interruptions and leakages.
“We have done this while maintaining the lowest bills in Britain. These results are testament to the hard work of my colleagues over the past year,” she added.
However, she said the group was still not where it wanted to be on a number of issues.
“In particular, our performance on water quality complaints has to improve; we fell 32% short of our target this year. We have been investing in innovative technology and new processes to achieve this,” she said.
This has included usage of water-quality analytics, using the wealth of data in the group’s systems to build up analytical capabilities and help to assess the network.
“By doing this, we can identify areas at high risk of water-quality events and undertake active maintenance to maintain the health of our assets and prevent failures from occurring,” she added.
