Severn Trent (LON:SVT) has announced its interim results for the six months to 30 September 2019.
Operationally strong
− Customer and community focus reflected in encouraging results from shadow reporting of C-MeX, the new customer service measure for AMP7
− Strong performance in Water driven by improvement in measures our customers care about the most
− On track to hit our leakage target for the eighth time in nine years, improve supply interruptions by at least 40% this year, and deliver a 25% reduction in water quality complaints over the AMP1
− Continuing leadership in Waste, with £190 million in waste customer ODIs earned over four years and on track to deliver substantial environmental schemes to improve 1,600km of rivers in our region
− Performance supports full year customer ODI guidance of at least £25 million net reward
− Continued high levels of investment, with capital expenditure of £374 million for the first half
− Reinvestment of £100 million totex outperformance progressing well, with projects such as the insourcing of our Network Response team setting us on the right glide path for a fast start in AMP7
Contributing to society
− Our fast-tracked PR19 plan ensures our customers’ bills will remain one of the lowest in the land for at least the next five years, while supporting 200,000 vulnerable customers per year by 2025
− Self-generating 51% of our energy needs following the integration of Agrivert, supporting our Triple Carbon Pledge of 100% renewables, 100% electric vehicles2, and net zero carbon by 2030
− Recognised as a top three employer by the Social Mobility Index and the Hampton-Alexander gender diversity report, reflecting our continued efforts to ensure Severn Trent is an inclusive place to work
− Financing our business responsibly with the launch of our Sustainable Finance Framework, and receiving the Fair Tax Mark for FY19/20
Good financial results
− Group turnover of £910.0 million, up £28.5 million (3.2%)
− Group underlying PBIT3 of £286.3 million, down £12.8 million (4.3%), following Teal Close property sale in the prior year, deferral of customer ODIs and increased investment in infrastructure renewals
− Group reported PBIT of £285.3 million, down £13.8 million (4.6%)
− Further fall in effective interest rate from last year end of 20 basis points to 3.7%, part of a reduction of 170 basis points in AMP6, positioning us well for AMP7
− Underlying basic EPS4 of 68.8 pence (down 9.7%) and basic EPS from continuing operations of 61.7 pence (down 11.6%), reflecting lower PBIT and our share of the loss from our joint venture, Water Plus
− IAS 19 pension deficit reduced by £62 million to £391 million; future funding plans now agreed
− Interim dividend of 40.03p
Footnotes: see definitions on page 2 of this RNS
Liv Garfield, Chief Executive Severn Trent, said:
“This has been another six month period where we have delivered for all of our stakeholders through strong performance, continued investment and environmental improvement, helping us to fulfil our goal of being the most trusted water company in England. Operationally we have made further progress over the last six months, with leakage, supply interruptions and water quality complaints all improving while delivering important environmental improvement schemes. We have continued to offer the lowest bills in the country while also investing for the long term, including in our biggest ever capital project, the £300 million Birmingham Resilience Programme, which is on track for completion by the end of the AMP.
At the same time, we have worked hard to be in the best possible shape for the next five years. Our job is to deliver for all of our stakeholders as we build a sustainable business that positively contributes to the society and environment we operate in and we are truly excited about delivering on the plans we’ve set out.”
