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Revenue and profit up for Severn Trent as chief makes pledge

Severn Trent hiked its dividend to shareholders after revealing profits rose by a fifth last year, despite sewage spills by the company rising by a third in 2023.

Severn Trent.

The company provides water to much of Wales and the West of England, lifted its final dividend 9% to 70.1p per share.

It comes as results for the year to March 31 showed turnover at the water company rose by eight per cent to £2.34bn from 2.16bn.

This helped the company report a profit before tax of £201m, 19.9 per cent higher than the equivalent period last year.

Severn Trent was responsible for more than 60,000 sewage spills last year, with those spill events lasting for more than 440,000 hours – equivalent to about 50 years.

The water firm said it had successfully raised £1 billion from investors, having announced the raise in 2023.

It said it is investing £450 million to improve 900 storm overflow points, about a third of the total across its infrastructure network, as part of a push to halve its average spill rate by 2030.

Severn also said it had invested £1.2 billion this year to “continue improving performance levels”. However, it comes after the water company asked to increase bills by 35.7% over the next five years.

In its five-year plan submitted to Ofwat, Severn Trent wants to invest £12.9 billion and increase customer bills to £546. Between 2020 and 2025, the average annual bill for Severn Trent was £402.63.

The latest bill hike demands come ahead of a crucial meeting this week when the industry regulator Ofwat will decide what companies can charge between 2025 and 2030.

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 status from the Environment Agency for an unprecedented fifth consecutive year.

"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 1,000 capital schemes which, once finished, will see a reduction of 20 per cent 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."

Ms Garfield was last week forced to defend her seven-figure pay package as the firm outlined plans to spend a major cash injection on reducing sewage spills.

She spoke about Severn Trent’s capital investment programme on BBC Radio 4’s Today programme and the chief executive admitted she had been paid £13 million in the last four years, saying: “Yes, it probably is true because it is performance-related.”

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