TIDMSVT
RNS Number : 4319G
Severn Trent PLC
19 July 2023
Severn Trent Plc Trading Update
Severn Trent Plc today announces the following trading update
for the period to 18 July 2023.
Strong operational and environmental performance
We are pleased to have been awarded the highest possible 4-star
Environmental Performance Assessment ('EPA')(1) status by the
Environment Agency for 2022, becoming the first company to maintain
this position for four consecutive years.
We remain on track with 100% of our environmental performance
commitments for this year and are making good progress with our Get
River Positive pledges and our programme to deliver the world's
first carbon-neutral waste water treatment works in 2024.
We have made a strong start to the year operationally and, with
reservoir levels at 77%, more than 10% higher than at this point
last year, are well-positioned for the summer months.
Financial performance in line with expectations
Financial performance remains on track and we expect to deliver
in line with expectations, including a net reward of at least GBP50
million in customer ODIs(2) , reflecting our sector-leading
performance for customers.
Across the Group, our natural economic energy hedge provides
protection against energy price volatility and we now have 45% of
our net energy exposure for 2024/25 locked in at significantly
lower rates than those for 2023/24.
We continue to manage our totex programme efficiently,
benefitting from our in-house engineering capabilities, advance
procurement strategy and direct relationships with a broad supply
chain. Our investment programme is moving at pace, with capital
expenditure expected to be between GBP850 million and GBP1 billion
this year, as we step up our delivery capacity ahead of AMP8, which
is expected to be one of the most significant investment periods in
the sector's history.
We remain well-positioned for this step up in investment with
regulatory gearing(3) of 60% at the most recent financial year end.
We are consistently named in the top category of financial
resilience by our economic regulator, Ofwat.
Liv Garfield, Chief Executive, Severn Trent Plc, said:
"We're pleased to have made a good start to the year, as we
continue to focus on delivering the operational, environmental and
financial performance our stakeholders expect of us. We recognise
that there is more we can do and we are committed to going further,
faster, to deliver the best possible outcomes for our customers and
the environment. The business is well placed to deliver the
progress needed with a highly engaged workforce, sustained
operational leadership and a strong balance sheet, supporting
future investment."
Reporting and investor timetable
In recent months we have published a number of documents which
provide our investors, customers and wider stakeholders with clear
and transparent information on our performance, including:
- Annual Report and Accounts
- Sustainability Report
- ESG data book
- Annual Performance Report
These documents can be found on our website at
www.severntrent.com . We welcome stakeholder feedback on our
reporting.
Our business plan for AMP8 (1 April 2025 to 31 March 2030) will
be submitted on 2 October 2023 and we look forward to bringing this
plan to life at our Capital Markets Day on 12 October 2023.
Footnotes
1. Environmental Performance Assessment (EPA)
A non-statutory tool for comparing performance between water and
sewerage companies (WaSCs) operating mainly in England. It uses
measurable environmental indicators to provide a meaningful
comparison of performance across the nine WaSCs in England. The
2022 assessment can be found at the following link:
https://www.gov.uk/government/publications/water-and-sewerage-companies-in-england-environmental-performance-report-2022
.
2. Outcome Delivery Incentives (ODIs)
A framework made up of outcomes, measures, targets and
incentives which provides companies with rewards for achieving
stretching performance targets and compensates customers if
performance is below performance targets. Outcome Delivery
Incentives are quoted pre-tax in 2017/18 prices. We assume a 25%
rate of corporation tax to be in place when ODIs are taken into
revenue.
3. Regulatory Gearing
Shadow regulatory gearing was 60.0% at 31 March 2023 (2022:
59.2%). This measure is calculated as net debt of our regulated
businesses, expressed as a percentage of estimated RCV, taking into
account amounts that will be included in the RCV at the end of the
AMP but which we have already incurred (namely our Green Recovery
programme).
Enquiries
Investors & Analysts
Rachel Martin Severn Trent Plc +44 (0) 7824 624 011
Head of Investor Relations
Media
Jonathan Sibun Teneo +44 (0) 207 353 4200
Press Office Severn Trent Plc +44 (0) 247 771 5640
Cautionary statement regarding forward-looking statements
This document contains statements that are, or may be deemed to
be, 'forward-looking statements' with respect to Severn Trent's
financial condition, results of operations and business and certain
of Severn Trent's plans and objectives with respect to these
items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'projects',
'potential', 'reasonably possible', 'targets', 'goal', 'estimates'
or words with a similar meaning, and, in each case, their negative
or other variations or comparable terminology. Any forward-looking
statements in this document are based on Severn Trent's current
expectations and, by their very nature, forward-looking statements
are inherently unpredictable, speculative and involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance and no assurances can be given that the forward-looking
statements in this document will be realised. There are a number of
factors, many of which are beyond Severn Trent's control, that
could cause actual results, performance and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to: the
Principal Risks and uncertainties detailed in this document; the
Principal Risks disclosed in our latest Annual Report and Accounts
(which have not been updated since the date of its publication);
changes in the economies and markets in which the Group operates;
changes in the regulatory and competition frameworks in which the
Group operates; the impact of legal or other proceedings against or
which affect the Group; and changes in interest and exchange
rates.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to Severn
Trent or any other member of the Group or persons acting on their
behalf are expressly qualified in their entirety by the factors
referred to above. No assurances can be given that the
forward-looking statements in this document will be realised. This
document speaks as at the date of publication. Save as required by
applicable laws and regulations, Severn Trent does not intend to
update any forward-looking statements and does not undertake any
obligation to do so. Past performance of securities of Severn Trent
Plc cannot be relied upon as a guide to the future performance of
securities of Severn Trent Plc.
Nothing in this document should be regarded as a profits
forecast.
This document is not an offer to sell, exchange or transfer any
securities of Severn Trent Plc or any of its subsidiaries and is
not soliciting an offer to purchase, exchange or transfer such
securities in any jurisdiction. Securities may not be offered, sold
or transferred in the United States absent registration or an
applicable exemption from the registration requirements of the US
Securities Act of 1933 (as amended).
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END
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