Qatar’s sovereign wealth fund splashes out on Severn Trent stake

Qatar’s sovereign wealth fund has increased its stake in utilities group Severn Trent by nearly £40m.

The Qatar Investment Authority (QIA) now owns 4.2% of the FTSE 100 group. which is valued at around £200m.

Earlier this month, Severn Trent, which has a market capitalisation of £4.57bn, posted a 6.8% rise in annual profit, boosted higher sales in its regulated and waste water business and growth in its business services division.

Pre-tax profit for the year for the year to the end of March rose £36m to £563.3m, as revenue rose 4.2% to £1.78bn.

Run by the Al-Thani royal family, QIA specialises in domestic and foreign investment and has £787bn of investments and owns department store Harrods and has stakes in Barclays and Heathrow Airport.

Last week, Severn Trent, which is one of Britain’s biggest water companies, warned that Labour’s plan to nationalise the industry could hit shareholders and increase bills for customers.

Severn Trent also said that the party’s policies “may fundamentally impact” its ability to deliver key plans.

In January, Ofwat fast-tracked Severn Trent Water’s business plans for 2020 -2025, which set out how it will reduce bills for customers.

Severn Trent Water, which shared the good news with South West Water and United Utilities Group, said its business plan includes additional spend of £160m to address supply, environmental and water trading opportunities, and targets which demonstrate ambition to deliver further improvements for customers.

The regulator said the three companies set out how they will cut bills by up to £70 in real terms while “significantly improving support for vulnerable customers and deliver real change in the areas that matter most to customers, like cutting leakage”.

Severn Trent Water pledged to cut average water bills by £18, United Utilities by £43 and South West Water by £73.