Severn Trent to invest £150m after cutting leakages

WATER firm Severn Trent said it had reduced leakage to a record low level as it pledged to invest an additional £150 million in its network.

The group, which supplies some eight million customers across the Midlands and the heart of England, said the amount of water lost through leaks fell 7 per cent in the year to the end of March, below the target set by the regulator.

This, and a 1.6 per cent fall in consumption, helped the company to repeat its expectation that it will not have to enforce a hosepipe ban over the current financial year.

The group will spend an additional £150m over the next three years to enhance water security, on top of the £1.6 billion already planned.

Underlying pre-tax profits fell 4.6 per cent to £275.3m in the year, despite a 3.5 per cent increase in turnover to £1.8bn, after a weaker performance from its services arm.

The board proposed a final dividend of 42.06p a share, giving a total payout for the year of 70.1p, an increase of 7.7 per cent. The final dividend is payable on 27 July.

In addition, the firm is looking to make a special dividend payment of 63p per share.

Chief executive Tony Wray said: “We have beaten our leakage target, reduced supply interruptions, continue to forecast no water usage restrictions for our region this year and we maintained the lowest average charges for our customers.”

At its water division, turnover increased by 4.9 per cent to £1.5bn after it put up prices in line with inflation at the start of the year.