Severn Trent sees water consumption drop as wet summer turns off the taps

Severn, which supplies customers in areas of Yorkshire and North Lincolnshire such as Rotherham, Sheffield and Scunthorpe, said water consumption dropped 3 per cent in the six months to September 30. Commercial consumption, particularly among farmers, was lower-than-expected, while household usage also declined as customers did not need to water their gardens as often.

Revenues edged up 3.5 per cent to £761m as the drop in consumption was offset by an allowed 5.2 per cent price rise in the period.

Underlying pre-tax profits dipped 1.4 per cent to £269.1m as an increase in spending on improving infrastructure ramped up the group’s costs. MeteoGroup previously said 14.25in (362mm) of rain fell in June, July and August, making it the wettest summer since 1912. Severn said water consumption is expected to return to normal seasonal levels in the second half of the year.

Elsewhere, the group invested £22m in the period in leakage reduction and improving water treatment works. Severn announced in May it would spend an additional £150m of capital investment over the next three years. The company said the work completed so far already had a positive impact on performance.

Tony Wray, chief executive, said: “We have delivered again on our commitments to our stakeholders, we are on track with our £150m additional investment programme announced in May, delivering operational improvements in the areas we targeted for this year, improving our service to customers and producing sustainable, progressive returns for shareholders.”

The firm also said its leakage reduction was on target for the year to date, with leaks around 4 per cent lower in September than in March. Severn was recently one of a number of groups to respond to regulator Ofwat’s proposed changes to water licences.

Severn said it had made suggestions to overcome concerns regarding the prospect of losing 40 per cent of revenue from wholesale price controls and lack of clarity about future price controls.