Reservoirs fuller than last year, says Severn Trent Water
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The water supplier for the Midlands and Wales has said it is “well-positioned” to deal with the summer months, with water levels ahead of where they were a year ago.
Severn Trent Water said its reservoirs are 77% full – 10% higher than the same period a year ago.
It comes after fellow utility company South East Water was forced to impose a hosepipe ban on some of its customers in response to an unusually hot June.
As climate change intensifies, it is putting ever more pressure on water companies.
Drier summers do not just mean less water in the firms’ reservoirs, they also increase the amount of water that customers want to use.
Severn Trent also said it is on track to meet its financial expectations for the year, as investors eye trouble at its peer, Thames Water.
“Financial performance remains on track and we expect to deliver in line with expectations,” it told shareholders on Wednesday.
The business, which supplies more than 4.6 million homes and businesses, added: “We have made a strong start to the year operationally and, with reservoir levels at 77%, more than 10% higher than at this point last year, are well-positioned for the summer months.”
We are consistently named in the top category of financial resilience by our economic regulator, Ofwat
Severn Trent highlighted that its gearing – a measure of how much debt the company has compared with its equity – is lower than most other water companies.
“We remain well-positioned for this step-up in investment, with regulatory gearing of 60% at the most recent financial year end,” it said.
“We are consistently named in the top category of financial resilience by our economic regulator, Ofwat.”
The statement follows reports that Thames Water, which supplies millions of households in the London region, was close to being put into administration.
The water company managed to avoid disaster with an injection of £750 million of shareholder money announced last week.
Severn Trent chief executive Liv Garfield said: “We’re pleased to have made a good start to the year, as we continue to focus on delivering the operational, environmental and financial performance our stakeholders expect of us.
“We recognise that there is more we can do and we are committed to going further, faster, to deliver the best possible outcomes for our customers and the environment.
“The business is well-placed to deliver the progress needed, with a highly engaged workforce, sustained operational leadership and a strong balance sheet supporting future investment.”
Shares in Severn Trent rose 3.6% on Wednesday morning.
