Severn Trent confirms full-year outlook

14th Feb 2024 07:29

(Sharecast News) - UK water and waste firm Severn Trent reiterated its full-year outlook on Wednesday.

In a brief trading update, the London-listed firm - which supplies customers across the Midlands and Wales - said its "robust" financial performance remained in line with expectations.

It added that there had been "no material changes to the current year business performance or outlook" since its interim results, published at the end of November.

Severn said last autumn that it expected an increase in sales of between 7.5% and 10% over the year to March 2024 in its regulated water and waste water business.

It also flagged higher operating costs, due to rising energy prices and pay alongside increased investment to stem flooding.

Analysts currently expect annual pre-tax profits to come in around £238m, compared to £168m a year previously.

Severn also confirmed on Wednesday it was confident of retaining its four-star status in the Environment Agency's annual Environmental Performance Assessment. Four stars is the highest rating achievable.

The blue chip continued: "We continue to guide to at least £50m in outcome delivery incentive (ODI) rewards this year, despite having experienced ten named storms since September, contributing to the last six months of 2023 being the third wettest for England on record."

ODIs are a framework of outcomes, measures, targets and incentives which rewards companies for meeting specific performance targets. They are also used to compensate customers if companies fail to meet targets.