Severn Trent increases dividend despite rising bills

Severn Trent increased its dividend to shareholders after profits rose by a fifth last year, despite rising bills and the company’s sewage discharges rising by a third in 2023. The FTSE-listed firm, which supplies water in Leicestershire, raised its final dividend. 9% to 70.1p a share, while profit rose to £201.3m.

Severn Trent was responsible for more than 60,000 sewage spills last year, with these spill events lasting more than 440,000 hours, the equivalent of around 50 years. The water firm said it had successfully raised £1bn from investors after announcing the increase in 2023.

It said it was investing £450m to improve 900 stormwater points, around a third of its total infrastructure network, as part of efforts to halve the average leakage rate by 2030. Severn also said it had invested £1.2 billion in this. year to “further improve performance levels.” However, it comes after the water company asked to increase bills by 35.7% over the next five years.

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In its five-year plan submitted to Ofwat, Severn Trent wants to invest £12.9 billion and increase customer bills to £546. Between 2020 and 2025, the average annual bill for Severn Trent was £402.63. The latest demands for bill hikes come ahead of a crucial meeting this week when industry regulator Ofwat will decide what companies can charge between 2025 and 2030.

Liv Garfield, chief executive of Severn Trent, said: “I am proud of the performance our brilliant teams have delivered this year, whether for our customers, the environment or the whole region. help us continue to transform the network, reducing leakage, improving the health of the river and providing our customers with the best and most reliable service.

“We are planning record levels of investment in the coming years, while keeping our bills the second lowest in the country. Our customers and the communities they live in are at the heart of our business and we are doing more than ever to ensure we have a positive economic, environmental and social impact in our region.”

Ms Garfield faced heavy criticism earlier this week for her £3.2m pay package for 2023, which includes salary, bonuses and shares. Meanwhile, over the past four years, she has earned nearly £13m.

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