Severn Trent Plc Trading Update
Severn Trent Plc today announces the following trading update for the period to 18 July 2023.
Strong operational and environmental performance
We are pleased to have been awarded the highest possible 4-star Environmental Performance Assessment (‘EPA’)1 status by the Environment Agency for 2022, becoming the first company to maintain this position for four consecutive years.
We remain on track with 100% of our environmental performance commitments for this year and are making good progress with our Get River Positive pledges and our programme to deliver the world’s first carbon-neutral waste water treatment works in 2024.
We have made a strong start to the year operationally and, with reservoir levels at 77%, more than 10% higher than at this point last year, are well-positioned for the summer months.
Financial performance in line with expectations
Financial performance remains on track and we expect to deliver in line with expectations, including a net reward of at least £50 million in customer ODIs2, reflecting our sector-leading performance for customers.
Across the Group, our natural economic energy hedge provides protection against energy price volatility and we now have 45% of our net energy exposure for 2024/25 locked in at significantly lower rates than those for 2023/24.
We continue to manage our totex programme efficiently, benefitting from our in-house engineering capabilities, advance procurement strategy and direct relationships with a broad supply chain. Our investment programme is moving at pace, with capital expenditure expected to be between £850 million and £1 billion this year, as we step up our delivery capacity ahead of AMP8, which is expected to be one of the most significant investment periods in the sector’s history.
We remain well-positioned for this step up in investment with regulatory gearing3 of 60% at the most recent financial year end. We are consistently named in the top category of financial resilience by our economic regulator, Ofwat.
Liv Garfield, Chief Executive, Severn Trent Plc, said:
“We’re pleased to have made a good start to the year, as we continue to focus on delivering the operational, environmental and financial performance our stakeholders expect of us. We recognise that there is more we can do and we are committed to going further, faster, to deliver the best possible outcomes for our customers and the environment. The business is well placed to deliver the progress needed with a highly engaged workforce, sustained operational leadership and a strong balance sheet, supporting future investment.”
Reporting and investor timetable
In recent months we have published a number of documents which provide our investors, customers and wider stakeholders with clear and transparent information on our performance, including:
– Annual Report and Accounts
– Sustainability Report
– ESG data book
– Annual Performance Report
These documents can be found on our website at www.severntrent.com. We welcome stakeholder feedback on our reporting.
Our business plan for AMP8 (1 April 2025 to 31 March 2030) will be submitted on 2 October 2023 and we look forward to bringing this plan to life at our Capital Markets Day on 12 October 2023.