Severn Trent PLC (LON:SVT) said it has not yet seen evidence that it will be affected by the coronavirus pandemic but still anticipates an increase in customer bad debts as government support schemes come to an end in coming months.
The FTSE 100 water company said it continues to expect the group will deliver full-year trading performance in line with prior guidance, with a £50-85mln hit to revenue from the virus effects.
READ: Severn Trent ups dividend despite expected rise in bad debt from coronavirus
A “strong start” has been made to the new AMP7 regulatory period and the company said it was confident of a net positive outcome on customer outcome delivery incentives (ODIs).
Having contracted for 80% of its first-year capital programme, Severn Trent said it has “made a fast start on delivering this, with minimal impact from COVID-19”, being on track to invest £430-510mln this year in infrastructure.
Some of this investment may improve its record on water leakages, with a recent report showing Severn Trent was among the worst offenders, with 424mln litres of water leaked in a year, with the Public Accounts Committee’s report accused water companies in general of being “ponderous” and having made no progress in reducing leaks for two decades.
And while the West Country-focused company said it was “incredibly proud” to have improved its position in the past quarter in the Tortoise Responsibility100 Index, another report this month revealed it was again one of the worst offenders in terms of releasing raw sewage into rivers last year, with Severn Trent discharging untreated effluent into waterways for some 272,519 hours in 2019.