Severn Trent CEO steps down as utility firm posts 57% profit jump
Water group Severn Trent Plc has announced that chief executive Liv Garfield is stepping down at the end of the year, and will be replaced by James Jesic, its capital and commercial services director and the managing director of its Welsh division.
"Having made a strong start to the largest ever investment programme, Liv and the board agree that this is the right time to transition to a new CEO," the utility company said.
The move came after the start of Severn Trent's £15bn price review period, which includes record levels of investment in the water and waste networks across the Midlands.
The news came as the company delivered a 57% increase in pre-tax profits in the first half, and upgraded its full-year guidance for net performance incentives and cost savings.
Pre-tax profit totalled £466.2m over the six months to 30 September, up from £297.8m the year before, while adjusted earnings per share rose 74.1% to 101p. Revenues were 18% higher at £1.44bn.
However, the firm said it expects full-year pre-tax profits to be more weighted to the first half than they have been in the past. This is "due to higher consumption over the very dry summer, and the impacts in the second half of more customers switching from unmeasured to measured billing, increased infrastructure renewals expenditure and higher depreciation due to capital investment".
Severn Trent said it remains on track to meet most of its annual targets on its water net performance incentives (otherwise known as ODIs), including supply interruptions, water quality contacts and the Compliance Risk Index.
"The exception is per capita consumption, with customer demand remaining high during this summer's drought for both Severn Trent Water and Hafren Dyfrdwy - we have numerous initiatives in place including flow regulators, which help to promote water efficiency," the company said.
Nevertheless, the firm now expects to deliver at least £40m of ODIs over the year to 31 March, up from £25m previously, due to strong performances in reducing leakage, storm overflow spills and pollutions.
Meanwhile, cost efficiencies mean that operating costs and infrastructure renewals expenditure will rise by just 5-8%, compared with earlier guidance of up to 12% higher.
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