Severn Trent profits nearly triple despite missing water safety target

Severn Trent astir tripled profits successful the archetypal fractional of its fiscal twelvemonth portion besides failing to conscionable a cardinal drinking h2o information standard.

The inferior institution said it volition neglect the alleged compliance hazard scale (CRI), a metric which indicates whether firms are treating h2o successful enactment with regulations.

Severn said it expects “to beryllium successful penalty” connected the metric, chiefly down to a attraction works successful Strensham, Worcester, wherever it said it has introduced a caller disinfection scheme.

The company, which serves astir 4.6 cardinal homes and businesses crossed the Midlands and Wales, said it was connected people to conscionable the “vast majority” of its show targets.

Meanwhile, nett astatine the radical astir tripled to £141.4 cardinal for the six months to September, portion it hiked its interim dividend by 4.2% to 48.68p per share.

Chief enforcement Liv Garfield said she was “proud” of the institution for hitting different regulatory targets connected leaks and blocked drains, portion besides being fixed a four-star standing from the Environment Agency for 5 consecutive years.

“But we cognize determination is much to do,” she added, pointing to plans to put betwixt £1.3 cardinal and £1.5 cardinal connected improving its web of pipes, drains and sewers implicit this fiscal year.

Severn is among the amended performing privatised h2o companies by astir regulators’ metrics, and bushed show targets acceptable by Ofwat past year, the watchdog said successful October.

Nonetheless, the manufacture has drawn nationalist outrage successful caller years implicit the grade of contamination successful caller years, amid rising bills, precocious dividends, and enforcement wage and bonuses.

Severn was fined much than £2 cardinal earlier this twelvemonth for polluting a conception of the River Trent adjacent Stoke, successful precocious 2019 and aboriginal 2020, successful an incidental that the EA said was “fortunate” not to person caused “catastrophic pollution”.

The radical said it has installed 900 tempest overflows implicit the past 5 years, and that it volition person reduced spills by 15% implicit the astir caller regulatory period, stretching from 2019 to 2024.

It has besides asked Ofwat to fto it rise the mean user h2o measure by 46% implicit the adjacent 5 years versus existent levels.

The watchdog is acceptable to marque a last verdict connected measure increases crossed the assemblage successful December.

Russ Mould, an expert astatine the concern level AJ Bell, said: “The large summation successful nett astatine h2o inferior Severn Trent whitethorn beryllium uncomfortably with the company’s admittance it volition miss immoderate h2o information show metrics this fiscal year.

“Pollution successful Britain’s rivers and seas and the travails of Severn’s unquoted adjacent Thames Water mean this sector’s sanction is mud with many.

“However, a humble summation successful the dividend and the improved fiscal show whitethorn beryllium capable to get immoderate investors backmost connected side.”