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RNS Number : 1339I
Severn Trent PLC
31 March 2020
31 March 2020
Severn Trent Plc Trading Update
Severn Trent Plc, a leading water and wastewater company in the
UK, today announces the following update for the period to 31 March
2020.
Key highlights
-- No material change to current year business performance since
the 28 January 2020 trading update.
-- The health, safety and well-being of our people and the
millions of customers we serve throughout the Covid-19 outbreak is
absolutely our first priority. Our frontline teams continue to keep
essential services flowing across our region, while adhering to
strict hygiene and social-distancing protocols.
-- We have a robust financial liquidity position extending out
to early 2022 to manage through the current uncertainty, recently
supplemented by GBP200 million of US Private Placement receipts in
the week commencing 23 March 2020.
-- We remain on track to deliver at least GBP25 million of net
customer ODI outperformance payments for 2019/20, as previously
guided.
Covid-19
Our people have shown amazing commitment and dedication to
ensure our customers have continued access to one of life's
essentials, including those who need it most, in hospitals, care
homes and schools. We are doing all that we can to protect them as
they do so, with strict hygiene and social-distancing protocols in
place for all our field teams and production sites, and only
essential customer visits taking place. All of our people who can
work from home have the necessary equipment to do so.
In response to the outbreak, we have enacted robust incident
management and business continuity plans throughout our business,
we are working closely with our local resilience forums and
collaborating with others in the water sector.
We have increased communications to our customers, highlighting
the ways that we can support them through our priority services
register. We also recognise this will be a difficult time
financially for some of our household customers; we are here to
help and are actively promoting our range of existing social tariff
and vulnerable customer schemes to help them with their bills.
But we think we need to do even more to support our communities
in these unprecedented times. So today we are committing GBP1
million to support groups and charities helping those impacted the
most in our region(1) . Our aim is to make this available as
quickly as possible, so that we can start to make a difference
straightaway.
Financial and operational performance
There has been no material change to current year business
performance since the trading update announced on 28 January 2020,
and we continue to expect the Group will deliver full-year trading
performance in-line with previous guidance.
We remain on track to deliver at least GBP25 million of net
customer ODI outperformance payments for 2019/20, as previously
guided. As a result, across AMP6 we will have earned at least
GBP163 million (pre-tax, 2012/13 prices) in net customer ODI
outperformance payments, enabling us to defer GBP177 million
(pre-tax, nominal prices) into revenue in AMP7.
As a result of increased levels of capitalised interest and
lower RPI, we now expect net financing costs to be broadly flat in
comparison to last year, despite the increase in overall net debt
(previous guidance: higher year-on-year).
The restrictions implemented by the Government to limit the
spread of Covid-19 are likely to have a material impact on many of
the business customers of our joint venture company, WaterPlus. The
company has been making good progress on improving its underlying
operating performance, however this new challenge will
significantly impact the pace and certainty of its recovery
plan.
At the start of this month, Severn Trent Plc successfully raised
GBP200 million in the US Private Placement market, with an average
tenor of around 18 years - the first debt issue under our
Sustainable Finance Framework and the first debt raising for the
Holding Company since 2012. We received the funds in the week
commencing 23 March 2020.
Overall, we have a robust financial position which, supplemented
by the USPP cash, extends our liquidity out to early 2022. With
less than 2.5% of our debt requiring re-financing in 2020, and cash
and committed facilities of over GBP1.1 billion, we have good
financial resilience with which to manage the impact of the
outbreak. Given the uncertainty of how the situation will develop,
we will continue to closely monitor our cash flows and update our
contingency planning accordingly.
(1) Comprising GBP500,000 re-directed from our newly established
Community Fund and GBP500,000 of historic share forfeiture
proceeds.
Enquiries
Investors & Analysts
Rich 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
Jonathan Sibun Tulchan Communications +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 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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