Severn Trent has reported strong performance in its half yearly financial report for the six months to 30 September 2018.

The Group said it had made excellent progress on its AMP6 capital programme, with capex of £340 million in the first six months of the year and on track for over £650 million by the end of the year. Group turnover rose 3.6% - up £30.5 million to £881.5 million while interim dividend rose 7.9% of 37.35p.

Severn Trent has also locked in around 95% of £870 million totex efficiencies, with a £100 million reinvestment on track setting the company up for a fast start in AMP7.

ODIs are in line with expectations with Severn Trent maintaining its sector leading AMP6 ODI performance of £150 million to date.

The utyility is continuing to invest in renewable energy with the acquisition of Agrivert food waste plants adding an additional 106GWh per annum to its existing portfolio.

Liv Garfield, Chief Executive Severn Trent Plc, said:

" 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 AMP7. As we plan and invest for the future, we are on track for our biggest year of capital spend in a decade, with more than £300 million invested in the first six months to improve performance for our customers today and for generations to come.”

The FTSE 100 company highlighted a number of areas where it had performed well as it looks to build for the period between 2020 and 2025, when it is planning to cut bills by a further 5%. This means it will continue to offer the lowest average combined water and waste bills in Britain, as it has done since 2010.

Severn Trent research consistently shows that customers value waste water measures the most – the utility has improved its customer service and environmental performance in this area substantially in AMP6, earning £180 million in waste customer ODIs.

The firm said it had maintained its leading waste performance by employing greater use of data and technology to optimise the network.

The company has also pledged to cut leakage by a further 15% while also looking to become a more socially purposeful business.

At £340m in the half-year, the company is on track to invest more in infrastructure this year than for any year in the last decade, with projects including:

• Completion of Ambergate service reservoir in Derbyshire 18 months ahead of schedule;
• Commissioning of Minworth thermal hydrolysis plant just outside Birmingham two months ahead of plan; and
• Near completion of the new Birmingham Resilience Programme pipeline, with good progress being made on the new pumping station by the River Severn.
• Installation of more than 10,000 fixed acoustic loggers in areas of the highest risk of bursts, with a further 7,500 to be installed allowing us to find and fix leaks much more quickly;
• Extension of a satellite trial to spot leaks from space and of the award-winning leak detecting robot programme;
• Reduction of water quality complaints by 6%; and
• FaceTime and Skype video calls between customers and Severn Trent technicians which is helping to reduce fix times by a third.

Bad debt as a percentage of regulated revenue is currently 2.1% which, while down on the previous year-end, is higher than levels seen earlier in the AMP.

Severn Trent said this reflects “the tougher financial climate some of our customers find themselves in.” This firm is again on track to exceed its target for the number of customers it supports, with bigger and bolder ambitions for AMP7.

Severn Trent has developed a number of programmes to benefit the communities in which it operates, including:

• New community dividend which will be given to local communities through volunteering, donations to the Severn Trent Trust Fund, and a new commitment to use 1% of company profits for community schemes;
• Launched of a new customer campaign - Wonderful on Tap - with the aim of embedding behavioural change around water consumption
• With a third of the UK’s social mobility ‘coldspots’ in the Severn Trent region the company already focuses its apprenticeships and graduate schemes in those areas, and will be doing the same for its general recruitment going forward; and
• An innovative new education roadshow that is being offered all primary schools in the region, that aims to inspire the next generation of water users and leave a positive water legacy.

Liv Garfield continued:

“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.”