Jenni ReidBritish water utility group Severn Trent (SVT) reported higher revenue and profit in the six months to 30 September, as non-household water usage increased with the lifting of Covid-19 lockdown restrictions.
The FTSE 100 firm saw turnover of £958.2m, an 8% increase over the comparable six months of the last fiscal year, and profit before interest and tax of £255.6m, up 13.8%. The group said turnover was in line with expectations.
Adjusted basic earnings per share were 6% higher at 54.4p, with an actual basic loss per share of 73p due to a one-off deferred tax charge.
Annual profits in the full year to May 2021 had been 14% lower year-on-year due to reduced demand.
‘Strong start’
“We've made another strong start to the year as we focus on delivering for stakeholders across our region and delivering for customers in the areas that matter most to them, all while driving the financial performance of our business,” said chief executive Liv Garfield.
The Coventry-based group will pay a previously announced interim dividend of 40.86p, slightly up from 40.63p in fiscal 2020/21.
SVT stock was up 0.64% to 2,815p at 17:20 UTC on the London Stock Exchange.
The group said liquidity remains strong with cash flow requirements funded through July 2023. Undrawn committed facilities amounted to £950m.
The net pension deficit decreased to £291.5m at 30 September.
Quality concerns
The results also discussed the group’s environmental initiatives, after the government last week announced an investigation that could see water companies face legal action for releasing unpermitted sewage discharges into rivers and watercourses.
“There has been much discussion recently about the quality of our rivers and coastline. Rivers are key to our supply chain and, although we don't own our region’s rivers, we take our role in protecting and caring for them seriously,” Severn Trent said in the results.
The group pledged to fulfill its river quality targets set out in the Environment Act in a nine-year rather than 25-year timeframe.
Severn Trent also highlighted projects such as a collaboration with 9,000 farmers to counter fertiliser and chemical runoff into rivers; the establishment of bathing standard rivers; the introduction of a team River Rangers to monitor sites; and a local partnership to see the reintroduction of beavers into its region.
Read more: Severn Trent profits take a dip due to COVID-19 impact
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