British utility group Severn Trent PLC (LON:SVT) has posted a 4% rise in full-year profits, as higher revenues and a strong performance in its new Dee Valley Water business offset higher costs and business rates.
The FTSE 100 group, which supplies water to homes and businesses across the midlands, reported an underlying pre-tax profit of £541mln (2017: £520mln).
That was on revenue of £1.69bn (2017: £1.64bn), with the top-line getting a boost from £80mln worth of customer outcome delivery incentives (ODI), up from £47.6mln a year earlier.
Those incentives are paid to the waters by regulator Ofwat for hitting or exceeding targets, such as project completions and customer service.
Severn Trent heaped praise on Dee Valley, which it bought last February, saying the new addition enjoyed a “very strong year”.
On the back of the rise in revenue and profit, the Coventry-based company unveiled a £100mln investment drive to improve its offering and infrastructure.
“We've had another very strong year on customer ODIs, which we know are the metrics our customers care about most,” said chief executive Liv Garfield.
“This, allied with a strong set of financial results, and a backdrop of the lowest average combined bill in the land demonstrates our ability to deliver for our stakeholders in a balanced and sustainable way.”
Severn shares edged 0.4% higher in early deals to £20.69.