Severn Trent has delivered strong financial performance in the first six months of AMP8 with year-on-year profit before interest and tax (PBIT) growth of 57% and record levels of investment – the company will grow its regulatory asset base by 13% this year, according to its interim results for the six months to 30 September 2025 published today.

Key highlights include:

• Upgrading ODIs: net performance incentives (ODIs) of at least £40m (previously "at least £25m") driven by strong performance in reducing leakage, storm overflow spills and pollutions. 
• Driving cost efficiency: improved outlook on operating costs and infrastructure renewals expenditure, now expecting 5-8% year-on-year increase (previously "up to 12% higher").
• Regulated gearing expected to be 60%-65% at FY30, based on forecast regulatory asset base of £21.9bn.
• Combining clean energy, property and services businesses with new acquisitions to form Infrastructure Services, targeting around £100m EBITDA5 in FY30 (from £47.5m in FY25).
• Delivering customer priorities through excellence in operational performance
• Only company to achieve four star rating from the environment regulator in 2024, a sixth consecutive year of 'industry-leading' environmental status.
• Expect to achieve around 90% of ODI targets and 100% of our delivery incentive targets (PCDs) this year.
• Expect to halve storm overflow spills to around 13 in 2025 - analysis shows that even if ST had experienced last year's abnormally wet weather again, it would have achieved its 25% reduction target from 2024.
• On track to hit the leakage reduction target for an eighth consecutive year.

Commenting on the results, 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.

"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."

Finiancial performance

A strong first half financial performance saw the group deliver PBITgrowth of 57%. Severn Trent made a record £769 million investment in the first six months (2024/25: £665.9 million) , with regulatory asset base growth of 13% to £15.4 billion by the end of this financial year. Regulated gearing decreased to 61.5% compared to 62.7% at 31 March 2025 – the target range for regulated gearing by the end of AMP8 at 2030 is 60 – 65%.

Taking into account the Group's prospects and financial position, the Board has declared an interim dividend for the year ending 31 March 2026 of 50.40 pence, up 3.5% in line with its policy for the five years of AMP8 to increase the dividend by CPIH.

Severn Trent is also driving for growth outside the regulated business through Infrastructure Services businesses. This includes the new Network Services business, formed from the acquisition of two existing suppliers to Severn Trent Water, together with its existing Business Services division comprising the Operating Services, Green Power and Property Development businesses.

Chief Financial Officer Helen Mile, said the group sees significant potential for growth from all of these businesses and are targeting EBITDA of £100 million from Infrastructure Services by the end of 2029/30, predominantly through organic growth.

Financial highlights

• Group turnover during the period was £1,436.9 million (2024/25: £1,217.7 million), up £219.2 million (18.0%), driven by higher revenues in the regulated water and wastewater business (up £215.1 million) due to tariff increases and higher consumption over the dry summer.
• Turnover for the regulated water and wastewater business was £1,346.0 million (2024/25: £1,130.9 million) and PBIT was £466.9 million (2024/25: £294.5 million).
• Net labour costs of £131.2 million were 13.6% higher period-on-period. Investment in additional headcount to drive operational improvements in key strategic business areas such as pollutions, and to deliver the step up in our capital programme increased gross labour costs by £31.7 million.
• Net hired and contracted costs increased by £24.4 million (18.4%), up from £132.7 million to £157.1 million
• Power costs were £7.2 million or 8.1% lower period-on-period, driven by the lower wholesale weighted average price of electricity on imports (around £25/MWh lower). This was partly offset by increased consumption at water treatment sites during the hot summer months.
• Other costs were up by £5.5 million as a result of increased Ofwat regulatory fees, higher business rates and price increases to chemicals such as ferric sulphate.

Infrastructure Services

Infrastructure Services' turnover was £99.9 million (up 11.0%) and EBITDA was £21.3 million (down 12.7%). This includes the performance of the two new Network Services acquisitions, Industrial Jetting Water Systems Ltd (IWJS) and Watertight Management Ltd (Watertight), that were completed on 31 July 2025.

IWJS provides sewer rehabilitation and jetting services, removing sewer blockages to prevent pollutions and sewer flooding events. Watertight was one of Severn Trent’s key civil engineering suppliers and brings experience in complex mains renewals, infrastructure upgrades and incident response.

Both businesses were acquired as part of a strategic vertical integration of members of the Severn Trent Water supply chain, securing this part of the supply chain for Severn Trent Water and creating opportunities for Infrastructure Services to benefit from the increased sector investment over AMP8 and beyond. The businesses have contributed additional revenues to the period of £5 million and EBITDA of £0.2 million before acquisition costs of £1.5 million.

In Severn Trent’s Operating Services and Other businesses, turnover increased by £7.8 million due to recovery of higher charges from water and wastewater suppliers in the group’s MoD contract, the acquisition of Reigate Environmental Services Ltd and higher project revenue in Oren Services, Severn Trent’s reed bed business.

In Green Power, turnover was £2.9 million lower year-on-year as a result of lower incoming waste volumes translating into lower gate fee revenue.

Profit for the period and earnings per share

Reported profit for the period was £227.4 million (2024/25: £141.4 million). Basic earnings per share were 75.7 pence (2024/25: 47.2 pence). Adjusted basic earnings per share were 101.0 pence (2024/25: 58.0 pence).

The Board has declared an interim ordinary dividend of 50.40p per share (2024/25: 48.68p per share), which will be paid on 12 January 2026 to shareholders on the register at 28 November 2025