Severn Trent PLC (LSE:SVT)’s first-half results received a warm welcome from analysts and investors alike, as increased revenue saw shares in the water firm climb on Wednesday.
Reporting on the six months to September, FTSE 100-listed Severn Trent announced a near-10% jump in revenue to £1.17 billion driven by higher earnings from its consumer business.
Pre-tax profit fell, meanwhile, owing to higher energy and chemical prices, the company said, with the figure coming in 2.5% lower than the first half of 2022 at £255.1 million.
Chief executive Liv Garfield commented that the company “was doing more than ever” through investment to protect local environments and plug leaks and blockages, with the water industry as a whole having faced intense scrutiny in recent years.
Severn Trent is on track to achieve a strong environmental performance assessment rating from the Environment Agency as a result, she said.
“[This] would be five years in a row of achieving the top environmental performance rating from the Environment Agency,” Jefferies analysts said following the announcement, adding that an increase of the firm’s net debt was due to a jump in capital expenditure.
This saw Severn Trent’s debt gearing rise by 0.6 percentage points to 60.6%, as the company’s deficit increased from £7.2 billion to £7.5 billion over the first half of the year.
Jefferies backed Severn Trent following the update, noting the firm’s anticipation of penning full-year revenue in line with expectations - including between £2.15 billion and £2.20 billion from its consumer business.
Severn Trent shares rose 1.09% to 2,680p following the update.