Severn Trent PLC (LSE:SVT) has reiterated its guidance for the 2027 financial year, a day after avoiding a financial penalty from Ofwat over what the regulator described as "serious failings" in its handling of drainage and sewage services.
The FTSE 100 water company said trading since the start of the financial year had been in line with expectations, with operational and financial performance continuing to build on a strong start.
Management remains confident of delivering at least £50 million of total performance incentives this year.
Severn Trent said its investment programme remained on track, with around £440 million of capital expenditure in the first quarter, up 22% on a year earlier.
It expects to invest between £2.2 billion and £2.5 billion during the 2027 financial year as it continues upgrading its network.
The update comes after Ofwat concluded an enforcement investigation into Severn Trent's wastewater operations.
Although the regulator found the company had breached its duties and accepted there had been serious failings, it decided not to impose a financial penalty after the company identified the problems itself, invested to address them and cooperated with the investigation.
The company also highlighted the refinancing of its core bank facilities completed in June, increasing committed facilities to £1.65 billion across Severn Trent Water and Severn Trent, which it said strengthened liquidity and reflected favourable access to debt markets.
Severn Trent is due to report interim results in mid-November.
