Severn Trent plc Annual Results for the Year to 31st March 2022

Preliminary Announcement of Annual Results   

25 May 2022   

Results for the year to 31 March 2022   

Continuing to deliver a strong performance for all stakeholders

Supporting our region and enhancing the environment

• New affordability scheme worth £30 million to support an additional 100,000 customers through a rising inflation environment, taking the total number supported by 2025 to 315,000
• Launched our Get River Positive pledges, setting the benchmark for the industry, targeting a reduction in the average number of storm overflow spills to 20 by 2025 and committing to zero RNAGs¹by 2030
• Confident of achieving 4* Environmental Performance Assessment (EPA)²status from the Environment Agency for a third year running
• Delivered over 90% of our 5,000 hectare biodiversity commitment, five years ahead of plan, contributing 1% of UK's Nature Recovery Network target
• On track for Net Zero by 2030, with best-ever renewable generation of 507 GWh³, increasing total self-generation by 6% and recognised in the top 2% of global companies in the Carbon Disclosure Project's climate change 'A list'
• Levelling up across our region with 47% of this year's new talent intake coming from social mobility cold spots and 40% of our Kickstarters securing jobs or going back into further education

Best-ever operational performance with 88% of measures in positive territory resulting in £79m ODI⁴ rewards

• Improved service for customers and developers, with both measures of experience (C-MeX and D-MeX) in reward
• Delivered AMP⁵to date reductions in water quality complaints (20%), pollutions (30%) and blockages (33%)
• Good progress on capital schemes with £604m invested this year; AMP7 to date core capital spend 10% ahead of AMP6 and 100% of AMP7 to date Water Industry National Environment Programme schemes delivered
• Fast start on Green Recovery: 27,000 smart meters installed, construction underway in UK's first catchment-scale flood resilience programme in Mansfield and grant scheme launched for lead pipe replacement in Coventry

Strong financial performance, supporting growth in AMP7 and beyond

• RoRE⁶of 8.7% with our best-ever ODIs, totex control and financing outperformance
• On track to deliver 10.8% real RCV⁷growth in AMP7 (28.6% nominal RCV growth)
• Group turnover of £1,943 million, up 6.4% as non-household consumption returns to pre-pandemic levels
• Group adjusted PBIT⁸of £508 million and reported PBIT £506 million, both up £36 million (7.5%), in line with expectations
• Robust balance sheet with pension deficit reduced to £128 million and Regulated gearing of 59.5%⁹
• Consistently outperforming the cost of debt allowance, reflecting active treasury management and just 27% of debt index-linked
• Property profits £13.2 million; £50 million since 2017, half way to our ten-year target of £100 million by 2027
• Adjusted basic EPS¹⁰of 96.9 pence. Basic loss per share of 35.2 pence after exceptional deferred tax charge equivalent to 119.6 pence per share
• Proposed final dividend of 61.3 pence, in line with our inflation-linked dividend policy and payable on 13 July 2022

Liv Garfield, Chief Executive, Severn Trent Plc, said:

“From the frontline to the boardroom, we are committed to making a positive impact on our regions, its people and the environment. I am proud of what we've achieved during the past year, creating new jobs to boost the local economy, providing financial support to community projects and planting 74 Tiny Forests to leave a carbon neutral legacy for the Birmingham 2022 Commonwealth Games.

We've done this while delivering on our operational commitments; over 88% of our regulatory measures have met or exceeded target. We're playing our part in helping the UK become a sustainable, low carbon economy, recording our best-ever year of renewable energy generation.

In March we launched 'Get River Positive', a series of pledges to improve our region's rivers. This is not just an ambition, it is a firm commitment. We're investing £100m a year and an additional £566 million on Green Recovery projects to deliver these pledges.

As cost of living pressures continue, we're acting now to support people struggling to pay their bills. Our customers have the second lowest combined bill in the UK at around £1 per day but we know that for some, paying their bill is a challenge. I'm pleased to announce today that we will be helping a further 100,000 people to reduce their water bill by up to 90%, part of our plan to help end water poverty¹¹ in our region.”