Water supplier Severn Trent sees shares edge higher as profits rise and customer complaints fall by 35%

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Severn Trent shares edged higher this morning after the water company reported a rise in half year profits and said it had also seen a big fall in the number of customer complaints.

The FTSE 100-listed company posted pretax profits of £186.2million for the six months to September 30, up from £137.1million at the same point last year, due to lower financing costs and a cut in operating costs. Revenue for the first half was flat at £896.1million. 

Over the half year, Severn Trent said customer complaints fell by 35 per cent. It also experienced fewer supply interruptions, sewer flooding incidents and faster incident response times. 

In the pipeline: Severn Trent confirmed it made £372million of cost savings, with another £50million to come

The company, which supplies water to almost eight million people in Wales and across the Midlands, has just entered into a five year agreement with the regulator that determines what prices it can charge until 2020.

The agreement states that the firm must find more than £400million of cost savings. The company confirmed it had already made £372million, with another £50million in the pipeline.

Severn has pledged to cut water bills for the next five years, adding that its customers were still enjoying the lowest combined bills in Britain, averaging £329 a year.

Severn Trent said it will pay an interim dividend of 32.26p per share, slightly down from the 33.96p it paid a year earlier.

In late morning trade, Severn Trent shares on the FTSE 100 index were up 2p at 2,183p.

Liv Garfield, the water firm's chief executive, said: 'As we continue to become an even more customer focused business we have delivered some great improvements, evidenced by the decline in customer complaints, and we continue to have the lowest combined bills in Britain.

'Through more intensive management of our network we are seeing reduced supply interruptions, lower sewer flooding incidents and faster incident response times. 

'Our renewable energy programme continues its rapid roll out and we are on track to generate the equivalent of 50 per cent of our energy needs by 2020.' 

Garfield, who took the helm in April 2014 and is one of a handful of female FTSE 100 chief executives, added: 'Our more streamlined organisational structure is enabling us to speed up our decision making and approval processes while empowering our colleagues to make the right decisions for customers, for example when deploying our capital spend.

'In addition, all our teams now have new digital devices which, combined with our own apps, enable greater operational efficiency and even higher right-first-time service delivery.'