Severn Trent buoyant in face of Labour’s manifesto plans

Water company chief executive Liv Garfield has insisted that the sector was “doing a great job” in the face of Labour’s manifesto plan to nationalise companies taken private in 1989.

Severn Trent’s chief executive said: “We are investing a record amount of money. Lots of companies are really delivering from a customer perspective, with bills of less than £1 a day and £1400 invested per household over this regulatory period.”

Garfield would not comment on the likelihood of Labour forming the next government. However, the Midlands and mid-Wales water company’s shares climbed 2.5% on the back of strong results and have moved sharply higher since the publication of Labour’s manifesto, suggesting few in the City think that nationalisation is a possibility.

The water supplier, which boasts its 4.3 million customers have the lowest bills in the country at an average of £340 a year, is planning to improve its dividend payout over the next three years, after proposing a final dividend up 1%.

The higher payouts come on the back of a 4.3% increase in pre-tax profits to £525 million, after a mild winter helped Severn Trent to earn an improved incentive payment of £47.6 million.

Garfield said £10 million of the increased incentive was due to drier weather. It also helped the water company reduce sewer floodings by 21% year on year.