Severn Trent gives bullish outlook after delivering record FY profits

(Sharecast News) - Utility group Severn Trent reported record profits and said it expects to double earnings per share over the next three years, as it smashed market forecasts with its results for the 12 months ended 31 March. Profit before interest and tax rose 15.3% to £590.2m, with adjusted basic EPS jumping 41.2% to 112.1p - with both rates growth coming in at the highest levels in a decade. Analysts were expected adjusted EPS of 99p.

Revenues were up 3.8% during the period at £2.43bn, ahead of the £2.40bn consensus estimate.

The Midlands water provider said it delivered its "strongest-ever year operationally", investing £1.7bn through its capital programme, up 40% on last year and around treble the level of investment at the start of the AMP7 regulated asset management period, that ran between 2020 and 2025.

"In December our regulator approved £15bn of expenditure across the next five years, around twice the amount that was approved five years ago for the AMP7 period," said chief executive Liv Garfield.

"That will allow us to deliver further improvements for customers by 2030, including halving our usage of storm overflows, reducing the impact we have on river health, and delivering operational carbon net zero. And our performance this year gives confidence that we are primed to succeed."

Looking ahead, the firm predicts adjusted EPS will double over by the end of March 2028, helped by revenue growth outperformance, cost management and a strategic approach to financing.

The company raised its full-year dividend by 4.2% to 121.71p per share.

Shares were 1.7% higher at 2,758.57p by 0938 BST.