Severn Trent PLC PR19 Final Determination Update - SVT and HD (9602W)
16 Dicembre 2019 - 9:40AM
UK Regulatory
TIDMSVT
RNS Number : 9602W
Severn Trent PLC
16 December 2019
Severn Trent Plc
PR19 Final Determination Update for Severn Trent Water and
Hafren Dyfrdwy
Ofwat has today published its final determination on the PR19
plans for both Severn Trent Water and Hafren Dyfrdwy.
We are pleased Ofwat has approached the final determination 'in
the round'.
In respect of Severn Trent Water, our Totex allowance increased
by a further GBP91m over the next five years (in addition to the
GBP100m increase we received in the updated cost modelling in July)
in part reflecting a reduction in the annual shift in the frontier
efficiency target from 1.5% to 1.1%.
The benefit of this has been offset by a number of other
adjustments including notably the reduction in wholesale WACC of
16bps (reducing revenue by c.GBP75m over the next five years) and a
reduction to the RCV run-off(1) (worth c.GBP40m over AMP7 but value
neutral in the long term, as seen by an increase in our AMP7 RCV
growth to 3.8%).
We estimate the changes since July 2019 mean an overall
reduction of c.GBP50m in total revenue for AMP7.
We welcome the positive adjustments Ofwat has made to the
targets for our Supply Interruptions, CRI(2) and Mains Repairs
customer ODI measures for AMP7. In combination these changes will
have the effect of de-risking our plan, as reflected in the
movement on our P10/P90 ranges(3) from
-3.9%/+1.7% to -2.83%/+1.9%.
On Hafren Dyfrdwy, we are pleased to note that revenue will
increase by GBP3.6m across the next five years, and we will benefit
from a number of positive customer ODI adjustments including those
above.
We have until 15(th) February 2020 to consider the final
determinations in full and respond to Ofwat.
(1) RCV run-off is a measure of the annual depreciation of the
RCV to reflect the long-term nature of the benefit to customers of
the previous investment a company has made in its assets
(2) CRI - Customer ODI based on the DWI Compliance Risk Index
(CRI) is a measure designed to illustrate the risk arising from
treated water compliance failures
(3) The P90 and P10 are points on a risk distribution. The P90
points means there is only a 10% expected chance that the outturn
RoRE will be above the threshold provided
Enquiries
Investors & Analysts
Richard Eadie Severn Trent Plc +44 (0) 7889 806578
Head of Investor Relations
Rachel Martin Severn Trent Plc +44 (0) 7824 624011
Investor Relations Manager
Media
Press Office Severn Trent Plc +44 (0) 247 771 5640
Jonathan Sibun Tulchan Communications +44 (0) 207 353 4200
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 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).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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