Severn Trent boosts dividends despite rising bills

Severn Trent pre-tax profits rose by a fifth to £201.3m

Severn Trent has increased the money it pays out to shareholders despite planned hikes to bills and criticism over sewage leaks.

The firm plans to pay shareholders £300m in dividends after pre-tax profits rose by a fifth to £201.3m.

According to proposals submitted to water regulator Ofwat it wants to increase average bills by 35.7% over the next five years.

Chief executive Liv Garfield said a record level of investment would help the company keep bills low, reduce spills and improve river health.

Sewage spills into England's rivers and seas more than doubled in 2023, according to the Environment Agency.

Severn Trent was responsible for more than 60,000 leaks last year, a rise of a third.

The firm said it had raised £1bn from investors and was investing £450m to improve 900 storm overflow points as part of a push to halve its average spill rate by 2030.

Severn Trent also said it had invested £1.2bn this year to "continue improving performance levels".

In its five-year plan submitted to Ofwat, the water firm said it wanted to invest £12.9bn and increase customer bills to £546.

Between 2020 and 2025, the average annual bill for customers was £402.63.

A meeting later this week will see Ofwat decide what companies can charge between 2025 and 2030.

Chief executive Liv Garfield said Severn Trent was planning "record levels of investment in the coming years"

Ms Garfield said she was proud of her team's performance.

"The extra £1bn we raised from our investors will help us continue to transform the network, reducing spills, improving river health and providing our customers with the best and most reliable service," she said.

"We are planning record levels of investment in the coming years, while also keeping bills the second lowest in the country."

She added the firm was doing "more than ever" to ensure a "positive economic, environmental and social impact".

Ms Garfield also faced criticism this week for being awarded a £3.2m pay packet last year.

United Utilities and South West Water owner Pennon have also increased their dividend payouts to investors.