Debt raising move firms up Severn Trent's position group claims
Following its first debt raising exercise since 2012, Severn Trent Water’s parent company has reported itself as being in a “robust financial position to manage through the current uncertainty of the impact of the Covid-19 outbreak.”
In a trading update for the year to 31 March 2020 the company said £200m raised in the US Private Placement market has taken its cash and committed facilities to more than £1.1bn, extending its liquidity to 2022.
The debt injection was the first issue under Severn Trent’s Sustainable Finance Framework. The company said less than 2.5% of its debt requires refinancing.Nevertheless it cautioned: “Given the uncertainty of how the situation will develop, we will continue to closely monitor our cash flows and update our contingency planning accordingly.”
Severn Trent reported “no material change” in its business performance since its 28 January update. “We continue to expect the group will deliver full-year trading performance in-line with previous guidance,” it said.
The company said it was on track to deliver at least £25 million in net customer operational delivery incentive outperformance payments for 2019/20, taking its AMP 6 ODI haul £163m. That will translate as £177 million deferred into revenue in AMP7.
With increased capitalised interest and lower inflation, the company said it expected net financing costs to be “broadly flat” year-on-year despite the increase in overall net debt.