Severn Trent Announces Profits Worth Millions Yet, Seeks to Increase Bills for Customers

Severn Trent, a major UK water supplier serving millions across Wales and the Midlands, has reported pre-tax profits of £297.8 million for the first half of the financial year, up by £42.7 million compared to the same period last year.

At the same time, the company is requesting a £580 annual bill for customers, up from the current £438—a rise that follows a 7.2% increase last year.

Key Details:

• Shareholder Gains:

  • A 4.2% dividend increase has been announced, raising payouts to 48.68 pence per share.
  • The company’s share price rose by 2.2%, increasing its value by approximately £180 million.
  • Shareholders include major global asset managers like BlackRock, Vanguard, and Legal & General.

• Executive Bonuses:

  • In 2023/2024, Severn Trent executives received £3.36 million in bonuses, an increase from the previous year.

• Performance and Penalties:

  • Severn Trent is under investigation by Ofwat, the water regulator, over its pollution reduction obligations.
  • Despite receiving the Environment Agency's top four-star rating, the company admitted it would fail water quality standards and face penalties.

• Investment Plans:

  • The utility announced its highest-ever investment of £665.9 million for infrastructure improvements, including reducing pollution.

This announcement aligns with trends seen across the UK water industry, with companies like United Utilities also reporting significant profits while requesting bill hikes. Criticism is mounting over high executive bonuses and shareholder returns in the face of public dissatisfaction with water quality and rising costs.
Source: Sky news