Severn Trent PLC said it expects a record year of capital investment as it builds momentum in the first year of the new regulatory period.
In an update covering the first 10 months of its financial year, the FTSE 100-listed water group said financial performance was in line with expectations and it remains on track to meet environmental and operational targets.
The company now expects to come in towards the top end of its £1.7 billion-£1.9 billion capital investment range, which would mark its highest ever annual spend.
It also expects to deliver at least £40 million of rewards from outcome delivery incentives and price control deliverables, assuming all milestones are met.
New chief executive James Jesic, replacing Liv Garfield, who stepped down in November after 11 years in charge, said: "This has been a quarter of delivery in a period of strong growth."
The update comes as the sector awaits further detail on the Government’s water reform plans. Severn Trent said it had welcomed the White Paper last month and is looking for clarity in a transition plan later this year.
Severn Trent is targeting a seventh consecutive four-star environmental rating, after Environment Agency figures in the autumn showed eight of nine water companies were rated poor or requiring improvement, with Severn Trent the only operator to secure full marks despite recording more than 62,000 sewage spills during the year.