Severn Trent PLC Continued strong performance while investing for the future

Severn Trent PLC (LON:SVT), today announced Interim results for the six months to 30 September 2018

· Ongoing delivery for customers

− Upper quartile position in the UK Customer Service Index for utility companies

− ODIs in line with expectations maintaining sector leading AMP6 ODI performance of £150 million to date1

− Maintained leading waste performance by employing greater use of data and technology to optimise our network

− Continued progress on water performance. Delivering on catchment management customer ODI and forecasting a further 6% reduction in the number of water quality complaints

− Increased water production during hot, dry summer to meet a 22% increase in customer demand

· Planning and investing for the long term:

− Submitted high quality AMP72 business plan delivering 13% Totex efficiency, upper quartile financing and ambitious performance targets while maintaining lowest bills in England and Wales for another five years

− Excellent progress on our capital programme, with capex of £340 million in the first six months of the year and on track for over £650 million by the end of the year

− Locked in c.95% of £870 million totex efficiencies, £100 million reinvestment on track setting ourselves up for a fast start in AMP7

− Investing in renewable energy with our acquisition of Agrivert food waste plants adding an additional 106GWh per annum to our existing portfolio

· Good Group financial results for the half year:

− Group turnover of £881.5 million, up £30.5 million (3.6%)

− Group underlying PBIT3 of £299.1 million, up £12.4 million (4.3%)

− Group reported PBIT £299.1 million, up £4.1 million (1.4%)

− Reduction in effective interest rate by 70 basis points, driving underlying basic EPS4 of 76.2 pence (up 16.3%), basic EPS from continuing operations of 69.8 pence (up 12.2%)

− Interim dividend of 37.35p (up 7.9%)

Footnotes: see definitions on page 2 of this RNS

Liv Garfield, Chief Executive Severn Trent Plc, said:

“Our job is to deliver for all of our stakeholders – our customers, colleagues and investors – and by that we don’t just mean delivering high quality waste and water services. We want to make a fundamental difference in society and in the communities we serve. As such, we’re delighted to be one of a handful of companies, and the only utility, to be acknowledged as a Pathfinder Company by the Purposeful Company organisation and we look forward to developing our approach to this further in the future.

I’m pleased to be sharing a good set of financial and operational results in what has been a very busy first half of the year. The performance culture we have embedded into the organisation continues to deliver strong performance for our customers, also providing a great platform as we head into AMP7. As we plan and invest for the future, we are on track for our biggest year of capital spend in a decade, with more than £300 million invested in the first six months to improve performance for our customers today and for generations to come.

Building a lasting legacy is a key priority for us and we believe our PR19 plans will deliver what our customers have asked for, while maintaining the right balance of affordability and future investment”

Group results from continuing operations

Underlying results

Reported results