Severn Trent (LSE:SVT) delivered a strong first-half performance, reporting sharply higher profits and record investment levels, while also announcing that a change in leadership will take effect in early 2026. Shares slipped 1.2% in early London trading.
For the six months to 30 September, profit before interest and tax rose 56.5% to £466.2 million, supported by an 18% increase in revenue to £1.44 billion. The company said the improvement was driven by stronger top-line growth and disciplined management of financing costs.
Capital investment reached £769 million, up 15.5% year-on-year, as the group ramped up spending across its largest-ever infrastructure programme. Severn Trent now expects its regulated asset base to climb 13% to £15.4 billion by year-end.
“The next five years will be a period of exceptional growth for Severn Trent. We have made a strong start to our largest-ever investment programme, frontloading our investments to deliver faster for customers,” said CEO Liv Garfield.
“Thanks to these early investments, we’ve upgraded our forecasts for this year’s performance incentives… and delivered an unprecedented sixth consecutive year of top-rated environmental performance.”
The group increased its expected Outcome Delivery Incentive (ODI) reward for FY26 to at least £40 million, up from £25 million previously, and reaffirmed its regulatory return target of around 13% for the current year.
Looking ahead, Severn Trent aims to double adjusted EPS by FY28 and grow its regulatory asset base to £21.9 billion by the end of the 2025–2030 AMP8 period. The company also expects to achieve roughly 90% of its ODI metrics this year, while targeting large reductions in storm overflow discharges and continued progress on leakage.
Alongside the results, Severn Trent confirmed that Garfield will step down at the end of the year. James Jesic, currently capital and commercial services director, will assume the role of CEO on 1 January 2026.
Jefferies analyst Ahmed Farma said the upgraded guidance — including “ODIs of at least £40m, up from £25m previously” — indicates more than 5% potential upside to consensus profit before tax. He also noted that “the focus today [is] on CEO change,” calling Garfield’s departure significant given her long tenure and industry standing.
Separately, RBC Capital Markets analyst Alexander Wheeler described the half-year figures as “a strong start to AMP8,” saying the boosted ODI expectations and improved cost efficiency reflect solid business momentum. However, he cautioned that Garfield’s upcoming exit “will likely overhang the shares in the short term,” even though the broker considers Jesic “a great option to replace Liv going forward.”
Leave a Reply