Severn Trent (SVT) H2 2026 earnings summary

Executive summary

• Achieved strong annual results with 64.5% year-on-year earnings growth, driven by robust execution of a record investment plan and a performance-led culture, positioning for long-term growth amid climate change, population growth, and stricter environmental standards.

• Delivered £73m in performance incentives, invested £1.9bn, and supported 330,000 households with £127m in bill support while maintaining high environmental standards.

• Upgraded 2028 earnings guidance to at least GBP 2.50 (250p) per share, reflecting confidence in future performance.

• Submitted first tranche of reopener business cases for GBP 600 million in additional investment, supporting asset renewal and growth.

Financial highlights

• Revenue rose 16.6% to £2.8bn, driven by regulated water and wastewater business, with core revenue up GBP 378 million year-over-year due to bill increases, higher consumption, and inflation.

• Profit before interest and tax (PBIT) increased 45.9% to £861m; adjusted EPS grew 64.5% to 184.4p.

• Regulatory return reached 17.2%, with notional return on regulated equity at 11.6%.

• Regulated gearing maintained at 63.6%; regulatory asset base expanded 13% to £15.4bn.

• Dividend per share increased 3.5% to 126.02p.

Outlook and guidance

• Upgraded 2028 EPS guidance to at least GBP 2.50 (250p) from GBP 2.24.

• FY 2027 guidance includes at least GBP 50 million in performance incentive rewards and GBP 2.2–2.5 billion in capital investment, growing the regulatory asset base by 13% to GBP 17.4 billion.

• FY27 turnover expected around £2.9bn; operating costs to rise 7–9%.

• Regulated gearing targeted between 60–65% by FY30.

• At least £300m in performance incentives expected across the regulatory period.