Annual Review 2015

Securing the future

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At Severn Trent our role is to secure the future of water for the communities we serve. Watch the video (2.30)

Chief Executive’s review

It's the end of my first year as Chief Executive of Severn Trent and I have enjoyed every minute of the challenge of getting our business in the best possible shape for the next five years.
Liv Garfield, Chief Executive

Chief Executive’s review (169Kb)

Chairman’s statement

This has been an important year for Severn Trent. We have completed the final year of our AMP5 investment period in our regulated business and agreed a business plan with our customers and regulators for the next five years.
Andrew Duff, Chairman

Chairman’s statement (240Kb)

2015 Highlights

£1,801.3m
Group turnover 2014: £1,756.7m (restated)***
£300.4m
Group underlying profit before tax* 2014: £276.1m (restated)***
£148.2m
Group profit before tax 2014: £318.9m (restated)***
84.90p
Dividend per share 2014: 80.40p
107.2p
Earnings per share** 2014: 92.5p (restated)***

* Before tax, exceptional items and gains/losses on financial instruments.

** Before deferred tax, exceptional items and gains/losses on financial instruments.

*** Restated to classify Water Purification as a discontinued operation.

  • Good financial performance:
    • Adjusted EPS up 15.9% year on year
    • Underlying group PBIT £540.3 million, up 3.2% year on year
    • Reported group PBIT up 2.6% year on year
  • Focus on operational improvement:
    • Improved or stable performance on 12 out of 14 Ofwat KPIs year on year
    • Achieved target of 10% reduction in leakage over AMP5
  • Invested a further £547.4 million to complete AMP5 programme of £2.6 billion: RCV1 £7.7 billion at April 2015
  • Customer bills remain the lowest in Britain at £329 for 2015/16
  • Severn Trent Services re-focused – disposal of Water Purification business (US$81.2 million)
  • Industry leader in renewable energy – self generation equivalent to 28% of Severn Trent Water’s energy needs
  • Reported group PBT £148.2 million, reflecting fair value losses on financial instruments
  • Well positioned for AMP6:
    • Largest investment programme ever – £3.32 billion capital investment
    • New organisational structure and management team
    • £300 million of £372 million target efficiencies already locked in
    • Focused on outperformance
    • 2015/16 dividend 80.66 pence, followed by annual growth of no less than RPI until 2020

1 Regulatory Capital Value

2 At 2012/2013 prices

2015 Highlights + Financial review (110Kb)

What we do

Severn Trent provides clean water and waste water services in the UK and internationally through our regulated and non-regulated businesses – Severn Trent Water and Severn Trent Services.

Regulated - Severn Trent Water

  • Wholesale water and waste operations
  • Retail services

One of the largest of the 10 regulated water and sewerage companies in England and Wales. We provide high quality services to more than 3.3 million households and businesses in the Midlands and mid-Wales.

Non-regulated - Severn Trent Services

  • UK Operating Services
  • US Operating Services
  • Renewable Energy

UK Operating Services (incl. Italy and Ireland) UK Operating Services provides contract services to municipal and industrial clients and the UK Ministry of Defence (MOD) for design, build and operation of water and waste water treatment facilities and networks. Retail services are also provided to UK businesses.

US Operating Services US Operating Services provides contract services to community, municipal and industrial clients for the operation and maintenance of water and waste water treatment facilities and networks.

Our strategic framework

Our strategic framework (1.1Mb)

Our performance

We measure our performance across four broad areas, aligned to our strategy:

  1. Embed customers at the heart of all we do
  2. Drive operational excellence and continuous innovation
  3. Invest responsibly for sustainable growth
  4. Create an awesome place to work

Our performance (122Kb)

Case studies

Regulated

Severn Trent Water Limited is a regulated business. We work within five year planning cycles, with customer prices set by our economic regulator, Ofwat.

Regulated business model
+ performance review (1.2Mb)
Future is Sustainable Case Study

Working in partnership to protect our water courses

Our customers’ top priority is having a reliable supply of high quality water. To achieve that at an affordable price, we have to protect our water courses from pollution.

View case study (424kb)
Future is Resilient Case Study

Securing Birmingham’s water supply for the next 100 years

The Elan Valley Aqueduct has brought water to Birmingham for more than a century. Now we need to modernise and refurbish it, so it can serve our customers for at least the next 100 years.

View case study (1.4Mb)

Non-regulated

Our non-regulated business allows us to apply our water and waste water services knowledge to create and deliver services and products to UK and global municipal, industrial and commercial customers.

Non-regulated business model
+ performance review (900Kb)
Future is Renewable Case Study

Using food waste to power our processes

At our Coleshill sewage treatment works, we’re turning food waste into enough electricity to make the site self-sufficient.

View case study (521Kb)
Future is Protecting Case Study

Taking the lead on environmental performance

Our customers and other stakeholders value healthy rivers and want us to continue improving our local environment. That’s why environmental performance is central to our plans.

View case study (967kb)