Severn Trent has announced “another year of exceptional growth” with £1.9 billion invested in 2024-25, performance incentives ahead of expectations and an upgraded earnings outlook for 2028 in its preliminary announcement of annual results for the year to 31 March 2026.

The year marks Severn Trent’s highest ever level of capital investment of £1.9 billion - the scale of its investments has increased by over 60% in two years.

The utility’s regulatory asset base is projected to increase by an average of 10% compounded annually between 2025 and 2030, one of the highest in the sector and before the impact of additional investment through re-openers and AMP9 transition spend. In May, Severn Trent submitted proposals to Ofwat totalling almost £600 million for the first of three rounds of re-openers.

Severn Trent says the growth ahead is significant - not just for the next five years, but for decades to come.

Financial performance

Total regulatory income for the year was £1,078 million (2024/25: £1,013 million). Group turnover was £2,831 million (2024/25 £2,427 million) up £404 million (16.6%), driven by higher revenues in the Regulated Water and Wastewater business (up £380 million) mainly from tariff increases, but also from higher consumption during the drought period. Operational cash flow was £1,212 million, (2024/25: £869 million) as EBITDA increased by £311 million.

In its Infrastructure Services business the utility saw growth from higher recoveries on its Ministry of Defence contract in Operating Services and the acquisition of two Network Services businesses.

Group PBIT was up £271 million (45.9%) to £861 million. Regulated Water and Wastewater PBIT grew by £264 million driven by the higher revenue. In Infrastructure Services, EBITDA was £8 million higher. Group profit after tax was £371 million (2024/25: £229 million)

Financial highlights flagged up include:

• £1.9 billion invested driving a 13% increase in regulatory asset base to £15.4 billion.
• PBIT growth of 45.9% driven by increased revenues, operational leverage and efficiencies.
• Regulatory return of 17.2% from performance and indexation on the regulatory asset base.
• £1.8 billion debt financing raised this year at 66bps below the regulatory allowance for the cost of new debt.
• Regulated gearing of 63.6% (62.7% at 31 March 2025)
• Cost base resilience with 90% of energy costs hedged to FY29, including 100% in FY27.

Operational performance

Operational highlights include:

• Reduced pollutions by 35%, leakage by 8% and sewer floodings by 12% year-on-year, with AI contributing to efficiency, productivity and customer experience.
• Total performance incentives4 earned of £73 million (£59 million in 2022/23 prices), including year one regulatory delivery targets for mains renewal and meter installations.
• Accelerated delivery of storm overflow performance commitment from year two.
• £127 million of bill support provided for around 330,000 households.

Severn Trent says the year has seen particularly strong progress in leakage - with an 8% year-on-year reduction to the three-year average, this is now at its lowest ever level. The company remains “firmly on track” to achieve its 31.6% leakage reduction target by 2030 from a 2020 baseline.

To date, Severn Trent has deployed more than 650,000 smart meters across its network, enabling it to detect leaks and provide guidance to customers on how to address them. Currently, 17% of water into supply is lost through leakage and ‘no-dig’ techniques are now used on 44%

of communication pipe repairs. “With a carefully pressure-controlled network, we are confident the improvements we have driven in our leakage performance are embedded and sustainable,” the company says.

Improvement in waste and the environment

In March, Severn Trent published its updated Pollution Incident Reduction Plan (‘PIRP’) for 2026-2030 which details the investments and interventions that have enabled it to achieve a 35% year-on-year reduction in pollution incidents to 178 in 2025. This year alone the utility has invested around £1 billion in waste, focusing on building in-house capabilities, strengthening resilience and response times when it has an issue.

The PIRP sets out the trajectory to 2030, aligned with the company’s 25-year plan for improving and maintaining its drains and wastewater systems. For sewage pumping stations, treatment works, foul sewers, rising mains and combined sewer overflows Severn Trent is investing in power resilience, prevention of blockages, asset failure and structural defects.

Strong and collaborative relationships with supply chain are critical enabler of delivery

Storm overflows remain a critical focus – Severn Trent says that with the support of the supply chain, it has now implemented over 3,000 solutions and is seeing the benefits of its proactive investments in the previous regulatory period. In 2025, average spills reduced by 41% to 15 spills per storm overflow asset, outperforming its regulatory target and earning £10 million in reward.

The report says:

“Strong and collaborative relationships with our engaged supply chain are a critical enabler of delivery. In recent years, we have expanded and diversified our supplier base to over 150 partners, reducing delivery risk and increasing flexibility, using specialist providers for better outcomes. We currently have over 40% of our enhancement programme for the 5-year period to 2030 in contract and anticipate having 80% in place by March 2027.”

AI embedded in day-to-day waste operations and decision-making

The report says artificial intelligence is embedded in the utility’s day-to-day waste operations and decision-making. Data is being used to predict daily demand, storm impacts, flooding risks, and sewer blockages, all with a drive to implement proactive interventions and reduce service disruption. Severn Trent is also deploying AI to optimise sensor placement, improve pollution detection, and trial real-time network control to minimise spills and flooding.

Commenting on the results, James Jesic, Chief Executive, said:

"This has been another year of exceptional growth. We have invested £1.9 billion to deliver long-term benefits for our Severn Trent Water customers, increasing the scale of our investments by over 60% in two years. Our unique strength of internal capabilities coupled with strong supply chain relationships have enabled acceleration of investment delivery and growth in our water and wastewater infrastructure.

"I understand how vital it is we deliver for the local communities we serve and the responsibility we have to the people, businesses and public services depending on us for their water and wastewater services every day. More broadly, we are helping around 330,000 households with their bills and reaching over 15,000 people through employability support programmes.

"We continue to deliver meaningful outcomes for over 9 million people, while maintaining exceptional water quality standards and enabling economic growth in our region. Our investments are driving environmental improvements, including a 41% year-on-year reduction in average spills from storm overflows. There is more to do, and with the strength of our performance culture, I am excited by our ability to deliver for all stakeholders on the opportunities ahead."

Dividends

In line with its policy for AMP8 to increase the dividend by at least CPIH each year, the Board has proposed a final ordinary dividend of 75.62 pence per share for 2025/26 (2024/25: 73.03 pence per share). This gives a total ordinary dividend for the year of 126.02 pence per share (2024/25: 121.71 pence per share). The final ordinary dividend is payable on 15 July 2026 to shareholders on the register at 29 May 2026.