Severn Trent forecasts higher dividends for fiscal 2026

UK water utility Severn Trent SVT said on Friday its dividend policy for the five years to March 2030 would be linked to annual inflation growth including housing costs, and forecast 2025-26 dividends higher than the previous fiscal.

Britain's water sector is grappling with intense regulatory pressure to resolve leakage issues and meet environmental goals, while privatised utilities are accused of prioritising dividends and management bonuses over investing in upgrading their infrastructure.

The company said it expects dividend for financial year 2025-26 to be 126.02 pence, using the inflation and housing costs of the owner occupier as at November last year, compared with payout of 121.71 pence guided for the 2024-25 fiscal.

Severn Trent has linked the dividend to the additional measure of the consumper price index called CPIH for the five-year "eighth asset management period" to March 2030.

The increase in dividend payout comes after regulator Ofwat in its price review last month approved smaller increases in water bills than the companies had proposed.

Severn Trent also forecast performance for the year ending March 31 this yeart to be in line with its earlier guidance.