21st May 2025 09:16
(Alliance News) - Severn Trent PLC on Wednesday announced a higher dividend amid sharply higher profit, as it eyes further adjusted earnings and revenue growth.
The Coventry, England-based water utility said pretax profit jumped 59% to GBP320.1 million in the financial year ended March 31, from GBP201.3 million a year prior.
Revenue climbed 3.8% to GBP2.43 billion from GBP2.34 billion.
Net finance costs reduced by 13% to GBP243.9 million from GBP281.5 million.
Severn Trent proposed a final dividend of 73.03 pence per share, up 4.2% from 70.10p a year ago. This brings the total payout for financial 2025 to 121.71, up 4.2% from 116.84p.
Severn Trent guides for financial 2026 revenue for Regulated Water & Wastewater of GBP2.6 billion, up 16% from GBP2.25 billion in financial 2025, which had been up 4.5% from GBP2.15 billion in financial 2024.
The company expects a doubling in adjusted earnings per share over the next three years, with this to be weighted towards financial 2026. In financial 2025, adjusted EPS grew 41% to 112.1p from 79.4p in financial 2024.
Chief Executive Officer Liv Garfield said: "We're proud to be a successful Midlands business, sharing another year of record performance and continually improving service and value for our customers. We're focused on getting things done - with our largest ever investment of GBP1.7 billion in the people and places we serve, delivering major infrastructure improvements across the region."
She added: "Our strong operational and environmental performance has been made possible by our financial strength. The GBP1 billion equity raise we secured ahead of this five-year business cycle, combined with strong financing and cost control, has given us the firepower to invest in our growth plan and will see us create 7,000 new jobs in our communities and through our supply chain."
In January, the Water Services Regulation Authority, or Ofwat, which is responsible for the regulation of the privatised tap water and sewerage industry in England and Wales, said customers of Severn Trent will face higher bills.
The average customer's bill is set to increase by 47% over five years, to GBP583 in 2029-30 from GBP398 in 2024-25. Severn Trent had proposed a 54% increase to GBP612.
Ofwat had said in its final determination: "Our aim is to ensure the recovery of investment over a time period that broadly aligns with the benefits that customers receive from that investment. Because we spread the recovery of these costs over the long-term, companies must first finance their planned expenditure by attracting investment from both debt and equity providers."
Severn Trent shares rose 1.4% to 2,751.00 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News slot editor
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