04.10.05

4.10.2005: Meldung: Severn Trent Pre-close Trading Statement

Severn Trent is issuing the following trading update ahead of the close period
prior to the announcement of results on 6 December 2005 for the six months
ending 30 September 2005.

The Board considers that overall the Group has delivered a satisfactory first
half-year performance that is consistent with its expectations for the full
year.

The results will be prepared under IFRS. Severn Trent"s announcement on 19
September 2005 outlined the impact of IFRS on Severn Trent"s 2004/05 interim
and full year profit and loss account and balance sheet and provided important
context and information relevant to this trading statement. For convenience, an
extract from the business segment analysis from that announcement for the first
6 months to 30 September 2004 is set out in footnote 4 below.

In the first half-year Severn Trent Water has made a good start to the AMP4
period. It has benefited from a 15.2% increase in prices (including inflation)
from 1 April 2005. Its operating costs are being well managed in line with its
plan. Severn Trent Water is expanding its infrastructure maintenance programme
and activity levels are progressively increasing through the year. As a result
the first half expenditure for 2005/06 of around ?36m for such maintenance is
currently programmed to contribute approximately one-third of the total
expenditure for the year.

Biffa"s total PBIT is expected to be broadly similar to its performance in the
first six months of the 2004/05 financial year. In the UK collection division
profitability has improved. In the UK landfill division profitability was
maintained by higher prices offsetting the expected reduction in volumes from
the first half last year. There was a disappointing first half in Belgium.

Laboratories" total PBIT has improved from the level of the second half of 2004
/05 but is expected to be around 25% lower than the first half 2004/05. Cost
reduction measures are being implemented to counter the difficult market
conditions in the US while in the UK performance has been strong.

Services" total PBIT (which under IFRS now excludes the contribution from its
associate Aquafin) is expected to be around the result achieved for the second
half 2004/05, with its Water Purification and Operating Services all performing
well.

Net debt at the half year is expected to be around ?3.0 billion.

ENQUIRIES MONDAY 3 OCTOBER 2005:

Mark Wilson Severn Trent 0207 233 3914
Group Finance Director

Julian Wais Severn Trent 0207 233 3914
Head of Investor Relations

Peter Gavan Severn Trent 07901 517 447
Director of Corporate Affairs

Simon Holberton Brunswick Group 0207 404 5959


AFTER 3 OCTOBER 2005:

Mark Wilson : 0121 722 4267

Julian Wais : 07899 066 242

Peter Gavan : 0121 722 4310

Footnotes:

1 The financial statements presented have been prepared in accordance with
IFRS, as endorsed by the EU or where there is a reasonable expectation of
endorsement by the EU before the group prepares its first annual accounts
in accordance with IFRS for the year ending 31 March 2006, and
interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) or its predecessor body. The group"s
IFRS accounting policies are set out on pages 12 to 22 of its statement of
19 September 2005.

2 PBIT is profit before interest and tax and excluding exceptional items. In
this context exceptional items means material restructuring, termination
and disposal items.

3 Under IFRS, infrastructure maintenance expenditure in Severn Trent Water
is now prepared under IAS16, rather than FRS15. IAS16 provides that
additional depreciation be charged on the infrastructure assets and that
the infrastructure maintenance expenditure be charged as an expense as
incurred. FRS15 provided that the infrastructure maintenance expenditure
be charged on an average expenditure basis over the entire AMP period.
This means reported earnings will now be directly affected by changes
between periods for the actual levels of expenditure incurred for such
maintenance.


4 The IFRS PBIT Business Segment Analysis extracted from the 19 September
2005 announcement for six months ended 30 September 2004 is as follows:

September 2004
IFRS
?m
Group PBIT
Water and sewerage 176.4
Waste management 43.9
Laboratories 10.0
Water purification and operating services 3.4
Other businesses (0.9)
Unrealised profit on inter-segment trading 0.2
Corporate overheads (10.6)
--------------
222.4
--------------
5 This document contains certain "forward-looking statements" with
respect to Severn Trent"s financial condition, results of operations
and business and certain of Severn Trent"s plans and objectives with
respect to these items. Forward-looking statements are sometimes,
but not always, identified by their use of a date in the future or
such words as "anticipates", "aims", "due", "could", "may",
"should", "expects", "believes", "intends", "plans", "targets",
"goal" or "estimates". By their very nature forward-looking
statements are inherently unpredictable, speculative and involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future.

There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied by
these forward-looking statements. These factors include, but are
not limited to, changes in the economies and markets in which the
Group operates; changes in the regulatory and competition frameworks
in which the Group operates; the impact of legal or other
proceedings against or which affect the Group; and changes in
interest and exchange rates.

All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to Severn
Trent or any other member of the Group or persons acting on their
behalf are expressly qualified in their entirety by the factors
referred to above. Severn Trent does not intend to update these
forward-looking statements.

This document is not an offer to sell, exchange or transfer any
securities of Severn Trent Plc or any of its subsidiaries and is not
soliciting an offer to purchase, exchange or transfer such
securities in any jurisdiction. Securities may not be offered, sold
or transferred in the United States absent registration or an
applicable exemption from the registration requirements of the US
Securities Act of 1933 (as amended).

Source: Severn Trent PLC
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