Severn Trent announces £100m investment programme

Severn Trent is set to invest £100 million into its water business, as the utility firm posts its latest set of financial results.

The company announced its preliminary annual results today (23 May), which show group turnover rose by £56 million to £1.6 billion in the year to March 2018.

The group also made underlying pre-tax profits of £541 million, which was up 4% on the previous year.

Speaking to Utility Week, chief executive Liv Garfield said the company will invest £100 million to “get ourselves ready for the future”.

“We are going to invest £21 million increasing the number of monitors across the network, so there will be an extra 20,000 eyes and ears across the network,” she told Utility Week.

“We’re going to spend £36 million on a targeted investment programme to really look after some of our long-term assets, making sure we have even greater resilience in the future.”

Garfield added Severn Trent has also launched an innovation fund to help develop new ideas and will be investing £10 million in the next 10 years to “train the engineers and leaders of the future” at a new centre of excellence.

The company’s preliminary results also show sewer flooding is down by 34%, water quality complaints are down 12% and serious pollution incidents are down by 71%.

“At the same time as improving service to customers, we are proud that we have the lowest bills in the land at less than £1 a day,” said Garfield.

“We have also beaten our targets by helping more than 50,000 of our most vulnerable customers again this year.

“There’s always more you can do. In the year ahead, we have a got a particular focus on supply interruptions and making sure than whenever our customers turn on the taps, they can have a cup of tea or a hot shower.”

Garfield said Severn Trent is also making good progress on its PR19 business plan, which will be ready for submission in September.

“It will be based on great customer service, affordable bills and long-term resilience,” she commented.

Utility Week reported yesterday (22 May) that the international ratings agency Moody’s changed its outlook on four British water companies – none of whom were Severn Trent – following proposals published last month by Ofwat to give it greater influence over the firm’s capital structure and dividends.

Responding to this, Garfield said: “We have said openly the next price review will be increasingly challenging and that’s good news for customers.

“What Ofwat are doing with their principles is laying out an opportunity whereby customers will get continued great service, even lower bills and they [Ofwat] have said they want to be much stricter on some of the financial metrics.

“We support the principles that have been outlined by the regulator and we have long stated there is more we can do to keep continuing that relationship of trust between the sector and consumers.”