Severn Trent PLC (LSE:SVT) has topped up its interim dividend by 4.6% although its profits increased slower than revenues and cash flow decreased in the first half following its stated intention to accelerate efforts to improve sewage discharge practices and protect rivers.
Revenue for the FTSE 100-listed water company came to £1.1bn for the six months to the end of September 2022, up 10.8% on the previous year as prices rose and so did the level of allowed revenue collection.
Profit before interest and tax rose by 2.4% to £261.7mln, with the company seeing higher power costs partially offseting higher revenue, as well as finance costs tripling from the inflation impact on its index-linked debt.
Free cash flow shrank to £133.9mln from £161.3mln, due to a higher investment spend, while net debt increased to £6.6bn from £6.2bn.
A 42.73p interim dividend was declared, up 4.6%.
Guidance for the full year remained unchanged, with the regulated water and wastewater businesses expected to make £1.97bn-£2.02bn, with a net reward of at least £50mln on its outcome delivery incentives (ODIs).
Back in March, the company said it would spend about £100mln a year to reduce its use of storm overflows as part of various commitments it claims will help prevent harm to rivers – with a Channel 4 investigation this summer revealing the company had over 400 potentially illegal discharge pipes.