Severn Trent has no plans to take drought measures

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WATER company Severn Trent said it does not plan to impose caps on use for its eight million customers, despite warnings of a drought later this year.

However, the listed utility firm, which supplies households and businesses stretching from Bristol to the Humber, said it is taking steps to improve “supply resilience” after record low rainfall this winter.

The Environment Agency this week warned it is “planning for the worst” amid fear parts of Britain may face the worst drought since 1976. Parts of South East England, East Anglia and the East Midlands are among the worst-affected areas.

“Severn Trent Water is not currently predicting any usage restrictions this year, despite record low rainfall over the winter period,” said the company.

“This situation remains under constant review, however, and the company is taking steps to improve supply resilience this year.”

The water company said it is on course to meet its target for cutting leaks, adding it is one of only three firms targeting reduced leaks year-on-year.

Severn Trent said recent trading has been in line with its expectations, and consumption levels are expected to be lower year on year.

Its bad debt levels are expected to be broadly stable compared with the first six months of its year, although the company said it continues to keep a close eye on the economy, especially unemployment levels.

Severn Trent said it expects net capital spending to remain in the £450m to £470m range, with net spending on renewals expected to be £120m to £130m.

Its services arm is on course for a better second half performance, compared with the first half. “However, markets remain challenging, with no significant upturn expected before the start of the next financial year,” it said.