Severn Trent PLC (LSE:SVT) has welcomed Ofwat’s decision on water sector pricing for the coming years and firmed up plans to hike dividend payments under the new regulatory regime.
“Following a detailed review,” the water firm said on Friday it was “pleased to accept” Ofwat’s final determination for the period between 2025 and 2030.
Regulator Ofwat had unveiled the rules last month, allowing Severn Trent to increase consumer bills by 47% over the coming years, or to £583 annually.
A total expenditure allowance of £14.9 billion would generate real regulatory capital value growth of 45%, it added Friday, opening the door for efforts to reduce sewage spills and pollution.
Dividend payments would also increase in line with inflation under the new rules, Severn Trent confirmed, leaving next year’s at around 126.02p per share, against 2024’s 121.71p.
Severn Trent also noted it remained on track to meet guidance in the current year.
Outcome delivery incentives, paid if water firms hit performance goals, were set to sit at over £100 million in 2017 prices, it said.