Severn Trent PLC on Thursday said it has made a ‘good start’ to the year, despite increasing energy costs.

The Coventry-based water company said it has made a ‘good start’ to the financial year operationally and continues to expect at least £50 million in customer outcome delivery incentive outperformance payments in the current financial year.

As anticipated, Severn Trent said it was seeing an increase in operating costs, particularly energy and chemicals, as outlined in its technical guidance.

The water company noted that it has retained its 4-star Environmental Performance Assessment rating for 2021. It is also on track to meet or exceed all of its environment outcome delivery incentives for the year, it added.

Chief Executive Liv Garfield said: ‘The environment is at the heart of everything we do and we’re pleased to have again been recognised as a leading performer in the sector, achieving the Environment Agency’s highest four-star rating for the third year running.’

In line with this, Severn Trent said that it is benefiting from its decade of investment in renewable energy generation. The company generated 145 gigawatt hours of energy in the first quarter of this financial year, which equates to over 50% of its consumption. This generation is 4% higher than the same period in financial year 2022, it added.

Shares in Severn Trent were down 0.2% to 2,832.00 pence each in London on Thursday morning.

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