Severn Trent takes aim in water fight with watchdog over spending plans
New boss: Liv Garfield joined Severn Trent two months ago
The new boss of Severn Trent faces her first test of mettle next month when she clashes with the water regulator over the firm’s spending plans until the end of the decade.
Liv Garfield joined only eight weeks ago but is already locked in negotiations with Ofwat over a major scheme for Birmingham.
She wants to spend £255million on a waterway that links Britain’s second city with Wales.
The origin of the water is the reservoirs of the Elan Valley – the location of a dam used as a test site for the 1943 Dambusters raid. From there the water takes a day and a half to reach Birmingham.
Severn Trent, which serves 4.3million customers, wants to spend millions reinforcing the waterway. But Ofwat has demanded to see detailed accounts of how the money will be spent and why it is needed. The firm will hand in revised plans next month.
Presenting her first set of annual results, Garfield revealed that Severn Trent’s annual profits rose more than 40 per cent to £282.7million – an increase that was inflated by accounting quirks around the value of financial instruments.
Sales ticked up from £1.8billion to £1.9billion, and the dividend was increased 6 per cent to 80.4p.
Shares yesterday rose 8p to 1941p.
Garfield left BT to take the helm at the water company, becoming, at 38, the youngest female chief executive ever in the FTSE 100.
She said she was committed to keeping the company’s bills the lowest in the country.
She added: ‘In my first eight weeks I’ve really enjoyed exploring the organisation from top to toe, and have relished spending time out and about listening to the views of thousands of my colleagues. I have seen a great deal of teamwork, enthusiasm and commitment to serving our customers and to improving our performance.’
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