Profits grow for Severn Trent
Water company Severn Trent, which serves millions of customers across the Midlands and Mid Wales, has revealed an increase in half-year underlying profit despite challenges with the summer's heatwave.
Profit was £299.1 million for the six months to September 30 2018, a year-on-year increase of 4.3 per cent.
The gains were supported by the company's property development business and good operating cost controls despite the challenges the long dry summer placed on its regulated water and waste water business.
Group turnover for the half year rose 3.6 per cent to £881.5 million.
Activity to support Severn Trent's performance in responding to the 22 per cent increase in customer demand for water in the summer cost about £10 million in the first half.
The company said it expected to absorb a similar amount of cost in the second half of the year to support the operational recovery required from such an event.
With respect to the £100 million investment announced at the end of last year, the company said this was now "fully allocated".
"We have approved individual projects in key areas such as water treatment and networks, energy efficiency and process automation," said chief executive Liv Garfield.
The firm added that it was on track for its "biggest year of capital spend" in a decade, with £340 million invested in the first six months and over £650 million expected by the end of the year.
The FTSE 100 company highlighted a number of areas where it had performed well as it looks to build for the period between 2020 and 2025, when it is planning to cut bills by a further five per cent.
The company has also pledged to cut leakage by a further 15 per cent while also looking to become a more socially purposeful business.
Highlights of the six months included the near completion of the new Birmingham Resilience Programme pipeline, which has seen money spent to make water supplies for the city more resilient.
The firm also carried out the installation of more than 10,000 fixed acoustic loggers in areas of the highest risk of bursts, with a further 7,500 to be installed allowing us to find and fix leaks much more quickly.
It also saw the reduction of water quality complaints by six per cent; and FaceTime and Skype video calls between customers and Severn Trent technicians helping to reduce fix times by a third.
Ms Garfield added: "We’re putting in place investment and innovation to stand us in good stead for years to come.
“We’re always striving to do more to ensure our customers have a great service every time from us.
“We believe that if we’re united by a clear social purpose, we’ll deliver better outcomes for all our stakeholders – our customers, our colleagues, our investors, the communities we live in and the environment that we depend on.”
