Having completed the penultimate year of its current regulatory period (AMP6), Severn Trent (SVT) is looking to build momentum for the next one in 2020. The 12 months ending 31 March saw the group’s largest capital expenditure in a decade, with £769m invested in the asset base and a further £141m in renewing the infrastructure network. A similar level of investment is anticipated in 2020 as the group moves to complete remaining projects and get a head start on AMP7.
In the face of a £190m waste outcome delivery incentive (ODI) cap, the group still managed a cumulative return on regulatory equity (RoRE) of 9.1 per cent across AMP6, among the top performers in the sector. Having agreed an ODI cap increase with the regulator, the full benefit will be experienced next year. Without the ODI cap, FY2019 would have been a record year, with ODI outperformance equivalent to £91m. The group expects to earn at least £25m in customer ODIs in 2020, increasing the amount of outperformance payments rolled into AMP7 to at least £177m.
| SEVERN TRENT (SVT) | ||||
| ORD PRICE: | 1,938p | MARKET VALUE: | £4.6bn | |
| TOUCH: | 1,936-1,938p | 12-MONTH HIGH: | 2,104p | LOW: 1,758p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 490p* | NET DEBT: | 501% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.80 | 148 | 48 | 84.90 |
| 2016 | 1.75 | 303 | 134 | 80.66 |
| 2017 | 1.64 | 328 | 139 | 81.50 |
| 2018** | 1.70 | 301 | 102 | 86.55 |
| 2019 | 1.77 | 385 | 133 | 93.37 |
| % change | +4 | +28 | +31 | +8 |
| Ex-div: | 13 Jun | |||
| Payment: | 19 Jul | |||
| *Includes intangible assets of £215m, or 91p a share **Restated | ||||
