Severn Trent shares higher as it issues trading update

Shares in Severn Trent plc gushed a little higher on Thursday (yesterday) after the water firm issued a trading update for the period to July 10 and said its financial performance for the year remained "on track".

In the first quarter, the utility said it had delivered over £300 million of capital investment and remained on track for its guidance of between £1.3 billion and £1.5 billion for the year.

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"Our significant investment programme this year and capital run rate position us strongly to deliver a successful capital investment programme through AMP8," it told investors in a stock market statement.

It comes as householders face an increase in water bills, reportedly set to rise by an average of 21 per cent over the next five years, or the equivalent of £19 a year under draft proposals by regulator Ofwat.

The company said it continued to invest in expanding energy generation and following a deal with international solar company Elgin Energy, its Green Power business will invest around £100 million to construct three large-scale solar farms, increasing the firm's energy generation by around 150GWh per year.

On spills, it said that storm overflow spills remained an area of significant focus for the industry.

"We have the most ambitious improvement plan in the sector, and our teams are in the field every day delivering interventions in our network which will improve 900 storm overflows this year alone. The work we have completed so far gives us confidence that we will be able to halve our spills rate by 2030," it said.

Shares in London added around 4% on Thursday to 2,724p.