Severn Trent has announced robust interim results for the six months ending September 30, 2025, highlighted by a 74% surge in adjusted EPS and an upgrade to its full-year 2026 outcome delivery incentive (ODI) guidance.
The company also announced that James Jesic will succeed Liv Garfield as CEO, effective January 1, 2026.
Revenue climbed 18.0% year-over-year to £1,436.9 million, while profit before interest and tax (PBIT) soared by 56.5% to £466.2 million. This performance underpinned the significant growth in adjusted earnings per share, which rose to 101.0p from 58.0p in the prior year. The interim dividend per ordinary share saw a modest increase of 3.5% to 50.40p.
The water company has been aggressively investing in its infrastructure, with capital investment reaching £769.0 million in the first half, a 15.5% increase from the previous year. This investment has driven a 13% growth in the regulatory asset base, expected to reach £15.4 billion by the end of the financial year, increasing the value on which it earns future returns.
Severn Trent’s strong financial footing allowed it to raise over £900 million in new debt this financial year, achieving the tightest credit spreads in the sector. This minimized net finance costs and contributed to overall financing outperformance. Net finance costs increased 29.4% to £161.2 million, reflecting higher inflation.
The company is upgrading its ODI guidance, now expecting net performance incentives of at least £40 million, up from the previous forecast of at least £25 million.
This improvement is attributed to strong performance in reducing leakage, storm overflow spills, and pollutions. Severn Trent also anticipates a 5-8% year-on-year increase in operating costs and infrastructure renewals expenditure, an improvement from the previously projected increase.
Severn Trent is reiterating its outlook of doubling adjusted EPS in the three-year period to FY28, from 112.1p in FY25. Regulated gearing is expected to be between 60% and 65% at FY30, based on a forecast regulatory asset base of £21.9 billion. The company is also targeting around £100 million EBITDA in FY30 from its Infrastructure Services business, which combines clean energy, property, and services, up from £47.5 million in FY25.
Severn Trent has achieved a four-star rating from the environment regulator for the sixth consecutive year. The company expects to achieve around 90% of ODI targets and 100% of its delivery incentive targets (PCDs) this year. It anticipates halving storm overflow spills to around 13 in 2025 and is on track to hit its leakage reduction target for the eighth consecutive year.
Liv Garfield, the outgoing 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.”
James Jesic, the incoming CEO, currently serves as Capital and Commercial Services Director and Managing Director of Hafren Dyfrdwy. His starting salary will be £775,000, compared to Liv Garfield’s salary of £873,200. Variable remuneration levels will match those of Liv’s current package, in line with the 2024 Remuneration Policy.
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