Severn Trent reported a “good set of results” in the first half of its financial year with revenue and profit growth.
For the six months to September 30, the water utility posted pre-tax profit of £203.6m, up 13% year-on-year from £180.9m. Profit before interest, tax and exceptional items came in higher at £299.1m from £295.0m.
This is set against the backdrop of a hot summer which saw more than 20% increase in customer demand.
“I’m pleased to be sharing a good set of financial and operational results in what has been a very busy first half of the year. The performance culture we have embedded into the organisation continues to deliver strong performance for our customers, also providing a great platform as we head into Seventh Asset Management Period between 2020 and 2025,” Chief Executive Officer Liv Garfield said.
The Midlands-based company, which provides clean water and waste water removal to more than 4m homes, said the “prolonged hot weather” in the UK during June and July created a “operationally challenging” environment. During those months, Severn Trent was hit by extra £10m in costs to increase production and meet a 22% increase in customers demand.
“We expect to absorb a similar amount of cost in the second half of the year to support the operational recovery required from such an event,” she added.
The FTSE 100-listed firm which supplies properties from the Humber to the Bristol Channel, is preparing for its “biggest year of capital spend in a decade” having invested more than £300m just in the first half.
Ms Garfield added: “We’re putting in place investment and innovation to stand us in good stead for years to come.
“We’re always striving to do more to ensure our customers have a great service every time from us.
“We believe that if we’re united by a clear social purpose, we’ll deliver better outcomes for all our stakeholders – our customers, our colleagues, our investors, the communities we live in and the environment that we depend on.”