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Severn Trent has begun exploring where capital expenditure projects can be brought forward to assist with the country’s green recovery ambitions – including moving up £80 million of projects to 2020/21.
The company, which revealed its half year results this morning (26 November), reported turnover down 2.5 per cent to £888 million, including a £33.2 million fall in consumption from commercial customers, principally as a result of Covid-19, partly offset by an uptick in domestic demand. Pre-tax profits fell by £61 million – a 21 per cent reduction year on year.
SVT has moved up capex projects scheduled for later in the AMP and is in discussions with Ofwat to accelerate more work from later in the regulatory period.
During the first year of AMP7 the company has invested £500 million and is exploring opportunities to fast track spending over the five years. One project the company brought forward is a thermal hydrolysis programme to drive carbon reduction and lower cost benefits for the company.
The company reported being on track for full year outcome delivery incentives (ODIs) rewards in excess of £25 million. It exceeded targets for pollution as well as reducing customer blockages and delivering biodiversity plans.
Water Plus has continued to struggle as the non-household water sector has seen its business customers forced to close in lockdown. Like its partner in the joint venture – United Utilities – Severn Trent wrote its investment in the company down to nil meaning it recorded no losses during the period.
Chief executive Liv Garfield reflected on the work the business has carried out under challenging circumstances: “I’m incredibly proud of what we’ve achieved, whether it’s getting the top environmental performance grade once again from the Environment Agency, improving services for our customers, increasing our investment to help the country build back better, or taking a leading role in the Kickstart Scheme. We’ve done all of that while striving to do the right thing for all of our stakeholders, including mental health programmes, our support schemes for vulnerable customers, and through our £1 million emergency Covid-19 fund.”
In the six months to 30 September the company provided £13 million to support customers in financial need and donated more than £3 million to community organisations and through the Severn Trent Community Fund to help projects across the region.
SVT confirmed an interim dividend of 40.63 pence.
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