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Severn Trent applies for Scottish licence.

Severn Trent Services (STS) has announced it is applying for a Scottish licence on the same day the company warns “markets remain challenging”.

If approved by the Water Industry Commission for Scotland, this will allow the company to provide water and sewerage services to Non-domestic customers north of the border.

The firms interim management statement said STS expected to deliver better performance in the second half than the first, but no significant upturn before the next financial year.

The group which also holds Severn Trent Water (STW) completed a £ 250 million 30 year bond last month at a coupon of 4.875%. STW reported operating expenditure in line with the boards expectations and below the level permitted by Ofwat in its price determination. It said net capital expenditure was likely to be between £ 450 million and £ 470 million not including costs associated with the adoption of private sewers in October. The private sewer transfer workload it said was at the lower end of the initial range of expectations. The company maintained it did not plan to introduce usage restrictions this year and is working to improve supply resilience.