Severn Trent Water says it is 'well-positioned' to deal with the summer months

A major water supplier has said it is “well-positioned” to deal with the summer months, with water levels higher than a year ago.

Severn Trent Water said its reservoirs are 77 per cent full, which is 10 per cent higher than the same period a year ago. The announcement comes after fellow utility company South East Water was forced to impose a hosepipe ban on some of its customers in response to an unusually hot June.

Severn Trent also said it is on course to meet its financial targets for the year.

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“Financial performance remains on track and we expect to deliver in line with expectations,” it told shareholders on Wednesday.

Severn Trent has told the City it is on track to meet its financial expectations for the year. (Photo by Yui Mok/PA Wire)Severn Trent has told the City it is on track to meet its financial expectations for the year. (Photo by Yui Mok/PA Wire)
Severn Trent has told the City it is on track to meet its financial expectations for the year. (Photo by Yui Mok/PA Wire)

The business, which supplies more than 4.6m homes and businesses, added: “We have made a strong start to the year operationally and, with reservoir levels at 77 per cent, more than 10 per cent higher than at this point last year, are well-positioned for the summer months.”

Severn Trent highlighted that its gearing – a measure of how much debt the company has compared with its equity – is lower than most other water companies.

“We remain well-positioned for this step-up in investment, with regulatory gearing of 60 per cent at the most recent financial year end,” it said.

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“We are consistently named in the top category of financial resilience by our economic regulator, Ofwat.”

The statement follows reports that Thames Water, which supplies millions of households in the London region, was close to being put into administration. Thames received an injection of £750m of shareholder money which was announced last week.

Severn Trent chief executive Liv Garfield said: “We’re pleased to have made a good start to the year, as we continue to focus on delivering the operational, environmental and financial performance our stakeholders expect of us.

“We recognise that there is more we can do and we are committed to going further, faster, to deliver the best possible outcomes for our customers and the environment.

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“The business is well-placed to deliver the progress needed, with a highly engaged workforce, sustained operational leadership and a strong balance sheet supporting future investment.”

Shares in Severn Trent rose 3.6 per cent on Wednesday morning.

In May, Severn Trent admitted that the water sector should have acted faster to tackle sewage spills as it anticipated the “biggest investment period the sector has ever seen”.

At the time, Severn Trent said it was leading on environmental change having hit 100 per cent of its performance pledges.

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“However, as a sector, we recognise that we should have given sewage activations much more attention and acted faster, and we want to be a driving force for positive change”, the company said.

It made improvements across its leakage performance, water quality complaints, and persistent low pressure and pollutions, but said external sewer flooding is a “key focus area”.

Suppliers across the UK are under pressure to modernise the Victorian-era sewage networks.