Severn Trent has today announced plans to deliver an investment programme worth more than £2.5 billion on network improvements and projects spanning the entire Midlands. The announcement accompanies the preliminary announcement of the company’s annual results for the financial year ending 31 March 2023.

As part of commitments being announced today, Severn Trent has pledged to complete an investment programme worth £2.5 billion on a series of projects spanning the Midlands, creating thousands of jobs through its supply chain. The company is set to invest millions of pounds to improve river health, secure water supplies and replace over 200 miles of new pipes to improve services for customers during the next two years.

This financial year has seen Severn Trent’s largest year of capital spend so far during AMP7- capital investment of £737 million across the Group is over £100 million higher than 2021/22. It is expecting to step up investment again next year as some of its Green Recovery schemes enter a key delivery phase. Severn Trent already has nominal prices agreed for 84% of its core capital programme ahead of its upcoming two biggest years of delivery.

The Chief Financial Officer’s Review said the firm had delivered strong financial performance this year in the face of challenging external factors including:

• Unprecedented wholesale energy prices;
• Cost pressures on chemicals, other materials and licence fees; and
• Additional operating costs during the exceptionally hot and dry summer and the freeze thaw event in December.

Severrn Trent said its proposed final dividend of 64.09 pence (2021/22: 61.28 pence), is in line with its inflation-linked dividend policy and payable on 14 July 2023.

The utility also delivered record energy generation of 5956 GWh, equivalent to 53% of Group consumption, with 45 GWh of additional generation expected from the planned acquisition of Andigestion Ltd.

During the year Severn Trent also made significant progress with its metering programme, installing over 166,000 meters this year, including 65,800 smart meters through the Green Recovery programme. The company is now accelerating its AMP8 plan to deliver a further 250,000 meters early. By the end of the AMP have installed over 750,000 meters over five years, taking us to 61% of network coverage.

In addition, the company also in-sourced key functions, including its ‘blue light’ Network Response team, providing more resilience and flexibility in-house, while work to optimise its planning and scheduling function has helped improve response times, for example reducing the time taken to fix leaks by a third. The teams are supported by real-time data from investment in smart assets, including the 30,000 acoustic loggers that now span our network.

Commenting on its 2022 annual performance of combined sewer overflow (CSO) activations, these improved by 28% to an average of 18 activations per CSO per annum, putting the firm ahead of plan to reach a target of an average of 20 activations per annum by 2025 and a maximum of 10 activations per annum in line with the Government’s 2050 target.

According to Severn Trent, while some of last year’s improvement can be attributed to 2022’s dry summer, the majority reflects the significant capital and operational investments the company has made. For example, by increasing investment in waste water treatment screens, which remove debris from flows into works, it has been able to expand storm tank capacity, increasing the flow through the network.

The company’s capital programmes advancing at pace as it ramps up for AMP8 – Severn Trent has already secured £200 million of additional annual supply chain capacity, and commenced early engagement with its partners. It has also established direct relationships with manufacturers of critical components to provide security on its pipeline for key programmes of work and optimised its advanced procurement strategy, adopting a manufacturing mindset in line with leading

practices.

The Midlands FTSE 100 company has also confirmed that in the next two years it will:

• Support 315,000 people a year with paying their water bill, up to 50,000 of these customers will now also receive additional financial debt support
• Create 1,000 new jobs in the region, including its biggest ever intake of 130 new skilled apprenticeships
• Severn Trent said it is committed to creating long term jobs, investing at a huge scale in the region and financially supporting more customers than ever before.

Liv Garfield, Chief Executive, Severn Trent, commented:

“Creating job opportunities, continuing significant regional investment, and financially supporting more customers than ever before is made possible by the strong results we have delivered this year.

“At a time when unemployment rates in our region are increasing and the cost-of-living crisis is still front and centre of many customers’ minds, we are proud to be able to create 1,000 jobs in our region over the next couple of years and to further help up to 50,000 customers with financial support. This, coupled with our long-term programme to help people into work, go towards truly supporting the communities we serve.

“This support is being delivered whilst continuing with the multibillion-pound investment in the region to improve water and waste services, providing an exceptional service and investing in our people who go above and beyond every day to make a positive impact in our region. We are expecting the biggest investment period the sector has ever seen, with a focus on water resources, improving environmental standards and on Net Zero, and we feel more than ready for this exciting opportunity ahead of us.”