Severn Trent has reported significant growth in profits due to an extensive investment strategy. The utility group, which services areas including Gloucestershire, announced its financial results for the half-year ending on September 30.
Surge in Profits and Revenue
For this period, Severn Trent reported a profit before interest and tax of £466.2 million. This reflects an impressive increase of 56.5% compared to the previous year. Additionally, revenue climbed by 18% to reach £1.44 billion. The company attributes this success to increased revenue coupled with effective management of financing costs.
Record Investment Program
Severn Trent has embarked on its largest investment program to date, with £769 million invested in the first half of the financial year. This represents a year-on-year increase of 15.5%. The goal is to accelerate customer service improvements while laying the groundwork for future growth.
Future Growth and Performance Targets
CEO Liv Garfield highlighted that the next five years are poised to be pivotal for Severn Trent. The company has upgraded its performance forecasts and aims to achieve exceptional service outcomes. For the year ending 2026, Severn Trent expects its regulatory asset base to reach £15.4 billion, marking a 13% growth.
- Interim dividend increased to 50.40p, up 3.5%.
- Outcome Delivery Incentives (ODIs) projected to deliver at least £40 million, up from £25 million.
- Forecasted regulatory return for this year is approximately 13%.
- Aim to double adjusted earnings per share by the 2028 financial year.
Strategic Initiatives and Environmental Goals
Severn Trent is also expanding its clean energy and property operations into a designated Infrastructure Services division. The target EBITDA for this division is set at £100 million by the 2030 financial year, a notable increase from £47.5 million in FY25. Also, the utility company is on track to meet its leakage reduction targets for the eighth consecutive year.
Leadership Transition
In related news, Liv Garfield will be stepping down as CEO in January 2026. James Jesic, currently serving as the Capital and Commercial Services Director, has been appointed as her successor.
Severn Trent continues to prioritize investment in infrastructure and technology to enhance service delivery and operational efficiency, ensuring sustainable growth for its stakeholders and the communities it serves.
