Severn Trent issues warning on impact of Labour nationalisation plans

Utility giant Severn Trent has warned that Labour policies for nationalisation of the industry would impact its ability to fulfil its strategic goals.

The opposition party led by Jeremy Corbyn laid out plans earlier this month under which it would offer shareholders in water utilities around half the current market value under a nationalisation programme, were it to win the next general election.

The firm said such policies “may fundamentally impact our ability to deliver the group’s strategic objectives, impacting shareholder value”.

It is engaging with the government, MPs, the Welsh government, regulators and stakeholders about the future direction of the water sector, it said as it published its full-year results.

Profits for the year to March 31 jumped 6.8% to £563 million as performance-related incentives from Ofwat offset a rise in costs following supply shortages last summer.

Group turnover rose by 4.2% to £1.77 billion after it hailed a “strong second half” and said it was confident for the current full-year.

The firm also said that its preparations for a no-deal Brexit are well advanced and include a Brexit steering committee to oversee its contingency planning.

Chief executive Liv Garfield said: “This has been a year where our teams have really stepped up, whether in response to customer needs in the face of one of the hottest and driest summers we’ve seen or by being named by Ofwat as one of the top companies in the sector when we received fast-track status for our future plans.

“At the heart of all of that is our drive to succeed for all of our stakeholders, which is shown in the results we’re announcing today.

“They demonstrate not only that we can deliver for our investors but also that we’re putting ourselves at the heart of the communities in which we live and work by building a lasting legacy for future generations.”

Shares in the company rose 0.9% to 1,936p in early trading.