Another water company seeking to increase cost of bills announces profits worth millions

Another water company seeking to increase the cost of customer bills has reported increased profit and shareholder payouts.

Severn Trent, the supplier to eight million people in Wales and the Midlands, booked £297.8m in pre-tax profit, £42.7m more than a year earlier.

It wants to pay its shareholders 4.2% more than last year – 48.68 pence a share.

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This is despite the company saying it will fail to meet water quality standards and face penalties.

It’s already under investigation by water regulator Ofwat over fears it may not be meeting its obligation to minimise pollution.

It was, however, one of just three utilities to achieve the Environment Agency’s top four-star performance ranking on pollution, including sewage outflows.

Severn Trent also announced its highest-ever investment – £665.9m to make improvements like reducing pollution.

Despite the higher profits, Severn Trent has requested even more expensive bills. It wants annual bills to cost £580.

Bills had already been upped to £438 annually for this financial year after being hiked 7.2% the year before.

Bosses at Severn Trent received the biggest bonuses of all water companies, according to analysis of company filings done by the Liberal Democrats last month.

Just three executives got £3.36m in bonuses in the 2023/2024 financial year, an increase from £3.319m year-on-year.

Good news for shareholders continued into Wednesday as Severn Trent’s share price grew by more than 2.2%.

Such a rise means Severn Trent has increased in value by roughly £180m.

Company shareholders include some of the world’s largest asset managers such as Blackrock, Vanguard and Legal & General.

Wednesday’s financial release covered the six months to 30 September.

Severn Trent’s results are in common with another firm – United Utilities – which last week reported hundreds of millions in profit as it similarly sought to hike customer bills.