Severn Trent says financial performance in line with expectations
Severn Trent PLC on Thursday said it continues to "build on our momentum" as operational and financial performance at the start of the financial year was in line with expectations.
The Coventry, England-based water utility said trading in the early months of financial 2027, which runs until March 31, 2027, is in line with expectations and backs guidance for at least £50 million of total performance incentives this year.
"Following a strong start to financial 2027, we continue to build on our momentum," Severn Trent said.
The company said it invested around £440 million in the first quarter, up 22% on-year, and remains on track to deliver between £2.2 billion and £2.5 billion of capital expenditure in financial 2027.
It also noted it completed the refinancing of its core bank facilities in June, increasing committed facilities to £1.65 billion across the group to support liquidity.
Severn Trent will report half-year results on November 18.
The trading update follows a decision by Ofwat, the water regulator for England and Wales, on Wednesday to conclude its wastewater investigation without imposing a financial penalty, despite finding the company committed "serious failings" in its management of wastewater and sewage.
Ofwat found Severn Trent had breached its statutory duties to provide effective drainage and sewage management, and had "historically" failed to maintain adequate systems and processes. However, the regulator said the company had proactively identified the issues before it opened its enforcement case in July 2024.
Ofwat noted that shareholders had already invested £98 million to address the issues and accepted a legally binding package of undertakings to ensure future compliance.
Severn Trent said it accepted the breaches identified and noted Ofwat's recognition of its proactive investment in wastewater infrastructure, board oversight and operational controls.
It added that average storm overflow spills fell 41% in 2025 and said it remains committed to further investment to improve environmental performance.
Severn Trent shares were 0.1% lower at 2,958.00 pence each on Thursday morning in London.
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