Severn Trent has completed a £1 billion equity placing to fund record investment levels as part of its transformational business strategy for 2025-2030.
The placing and transformation plan was well received by markets and Severn Trent shares were 7% higher at the time of writing on Friday.
The water company plans to invest £12.9 billion over the next regulatory period, including £5 billion on projects to enhance capacity and service. This represents a 31% increase in its regulatory capital value (RCV) and will create around 7,000 jobs.
The ambitious programme aims to reduce leakage by 16%, cut storm overflow spills by 30% and drive a 30% reduction in pollution. Severn Trent says it will eliminate 240,000 tonnes of carbon emissions, delivering net zero operations by 2030.
The company states the plan balances large investments with affordability. The average annual household bill will rise to £518 by 2029/30, up around £2.32 per month over five years. Severn Trent has set aside £550 million to support 693,000 struggling customers.
Liv Garfield, CEO at Severn Trent, commented on the investment plan:
“By 2030 we will have transformed our network to provide our customers with the very best service. At the heart of this ambition is a commitment to a sustainable future – from healthier rivers, to providing thousands of jobs, fewer leaks and a water supply ready for the impacts of climate change and population growth. At the same time, our £550 million affordability scheme aims to ensure no customer in our region needs to worry about affording their water bill.”
Placing
Severn Trent has £1 billion to fund their transformation with £500m committed by the Qatar Investment Authority. For the share price to rise after the placing is major endorsement by investors.
