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Utility group Severn Trent has reported a sharp rise in profits and record investment and updated its performance guidance.
In the half-year to 30 September, the group – which supplies homes and businesses across Gloucestershire – reported profit before interest and tax of £466.2m, up sharply by 56.5% on the same period last year, while revenue climbed 18% to £1.44bn.
It said this has been driven by higher revenue and tight control of financing costs.
Liv Garfield, chief executive, said: “The next five years will be a period of exceptional growth for Severn Trent. We have made a strong start to our largest-ever investment programme, frontloading our investments to deliver faster for customers.
“Thanks to these early investments, we’ve upgraded our forecasts for this year’s performance incentives to drive improvements in the things our customers care about most, and delivered an unprecedented sixth consecutive year of top-rated environmental performance.”
Garfield added: “We’re investing in people, technology and new businesses to secure the capabilities we need for the future.
“Backed by the financial strength of our group, we’re accelerating growth in our asset base which flows through to earnings. We’re confident we can deliver earnings growth and returns while investing even more for our customers, creating new jobs across our region and improving the environment for the communities we serve.”
The Coventry-headquartered utility invested £769m in the first six months, up 15.5% year-on-year, as it pushes ahead with its largest ever capital programme. Severn Trent expects its regulatory asset base to grow 13% to £15.4bn by year-end, increasing the value on which future returns are calculated.
Shareholders will receive an interim dividend of 50.40p, up 3.5%.
The group upgraded several key outlook measures for the 2026 financial year. Outcome Delivery Incentives (ODIs) — financial rewards for service performance — are now expected to deliver at least £40m, up from previous guidance of £25m.
Severn Trent is forecasting a regulatory return of around 13% this year.
Looking ahead to the rest of the 2025–2030 AMP8 period, the company reiterated its ambition to double adjusted EPS by the 2028 financial year from the 2025 baseline with a forecast regulatory asset base of £21.9bn.
The group is also expanding its clean energy, property and services operations into a combined Infrastructure Services division, targeting £100m EBITDA by the 2030 financial year, up from £47.5m in FY25.
The business expects to meet around 90% of its ODI targets and all of its delivery incentive targets this year. Storm overflow spills are forecast to halve to around 13 in 2025, and the firm is on track to meet its leakage reduction target for the eighth year running.
The group also announced today that Garfield will step down as CEO and executive director, with James Jesic selected as successor. Jesic is currently capital and commercial services director at Severn Trent and will take over as CEO and join the board from 1 January 2026.
