Preliminary Results - Part 2

Severn Trent PLC
6 June 2001


PART 2


Notes

1   Financial information

a   Results

The results have been extracted from the audited financial statements of the
group for the year ended 31 March 2001.  These audited statements
incorporate an unqualified audit report.  The results do not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985.  Statutory accounts for the year ended 31 March 2000, which
incorporated an unqualified auditors' report, have been filed with the
Registrar of Companies.


b   Exceptional restructuring and Year 2000 costs

Exceptional restructuring costs in the year to 31 March 2001 of £15.5
million relate wholly to Waste Management restructuring following the
acquisition of UK Waste. Restructuring costs in the year ended 31 March 2000
of £56.1 million substantially related to the costs of restructuring Severn
Trent Water following the AMP3 determination, and a restructuring of Severn
Trent Services.

Exceptional Year 2000 charges in the year ended 31 March 2000 of £8.6
million relate to the costs of ensuring that all group computer and
operating systems were Millennium compliant.

c   Taxation

                                               2001         2000
                                               £m           £m
                                                            
UK                                                          
corporation                                                 
tax           - current year at 30%            8.9          22.4
              - prior year                     0.3          (3.3)
Double taxation relief                         (0.5)        (0.9)
Overseas                                                    
taxation      - current year                   3.0          3.3
              - prior year                     (0.2)        -
Share of                                                    
taxation                                                    
charges          - joint ventures              -            0.1
                 - associates                  0.9          1.0
Advance                                                     
corporation tax  - prior year                  -            (0.5)
                                               ______       ______
Total taxation                                 12.4         22.1
                                               ______       ______
                                                            

d   Dividends

An interim dividend of 17.0 pence net per share was paid on 6 April 2001.
The Directors recommend a final dividend of 28.0 pence net per share, which
it is intended will be paid on 1 October 2001.

The final dividend will be payable to shareholders on the register on 29
June 2001 and shares will be traded 'ex-dividend' with effect from 27 June
2001.

The cost of the proposed equity dividends to the company's shareholders for
the year ended 31 March 2001 was £154.3 million  (2000: £153.7 million).
Dividends received or receivable by the company from its subsidiaries
comprised £135.5 million from Severn Trent Water Limited (2000: £145.0
million, plus a special dividend of £125.0 million to effect a capital
restructuring following the AMP3 determination)and £12.6 million from non
regulated businesses (2000: £11.6 million).  The group also received
dividends of £1.0 million from associates and joint ventures (2000: £1.5
million).

Severn Trent Water Limited's dividend policy is to declare dividends which
are consistent with its regulatory obligations and at a level which is
decided each year after consideration of a number of factors, including
regulatory uncertainty, market expectations, actual and potential
efficiencies, future cash flow requirements and balance sheet
considerations.  The amount declared is expected to vary each year as the
impact of these factors changes.

e   Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
in issue during the year, excluding those held in the Severn Trent Employee
Share Ownership Trust which are treated as cancelled.

For diluted earnings per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all potential dilutive
ordinary shares.  These represent share options granted to employees where
the exercise price is less than the average market price of the Company's
shares during the year.

Supplementary earnings per share figures are presented.  These exclude the
effects of restructuring costs in 2001 and 2000 and exceptional Year 2000
costs in 2000.  The directors consider that the supplementary figures
provide a useful additional indication of performance.

Earnings per share 2001
                                                        Weighted        Per
                                                         Average      share
                                        Earnings       number of     amount
                                              £m      shares (m)      pence
                                                                           
Basic earnings per share                   193.2           342.1       56.5
                                                                           
Effect of dilutive securities                                              
Options                                        -             1.5      (0.3)
                                          ______          ______     ______
Diluted earnings per share                 193.2           343.6       56.2
                                          ______          ______     ______
                                                                           
Supplementary earnings per                                                 
share
                                                                           
Basic earnings per share                   193.2           342.1       56.5
                                                                           
Effect of:                                                                 
  Exceptional restructuring                                                
  costs                                     15.5               -        4.5
  Exceptional Year 2000 costs                  -               -          -
                                          ______          ______     ______
Basic earnings per share                                                   
before exceptional costs                   208.7           342.1       61.0
                                          ______          ______     ______
                                                                           
Diluted earnings per share                 193.2           343.6       56.2
                                                                           
Effect of:                                                                 
  Exceptional restructuring                                                
  costs                                     15.5               -        4.5
  Exceptional Year 2000 costs                  -               -          -
                                          ______          ______     ______
Diluted earnings per share                                                 
before exceptional costs                   208.7           343.6       60.7
                                          ______          ______     ______
                                                                           

Earnings per share 2000                                 Weighted        Per
                                                         Average      share
                                        Earnings       number of     amount
                                              £m      shares (m)      pence
                                                                           
Basic earning per share                    251.5           340.8       73.8
                                                                           
Effect of dilutive securities                                              
Options                                        -             1.6      (0.3)
                                          ______          ______     ______
Diluted earnings per share                 251.5           342.4       73.5
                                          ______          ______     ______
                                                                           
Supplementary earnings per                                                 
share
                                                                           
Basic earnings per share                   251.5           340.8       73.8
                                                                           
Effect of:                                                                 
  Exceptional restructuring                                                
  costs                                     56.1               -       16.5
  Exceptional Year 2000 costs                8.6               -        2.5
                                          ______          ______     ______
Basic earnings per share                                                   
before exceptional costs                   316.2           340.8       92.8
                                          ______          ______     ______
                                                                           
Diluted earnings per share                 251.5           342.4       73.5
                                          ______         _______     ______
Effect of:                                                                 
  Exceptional restructuring                                                
  costs                                     56.1               -       16.3
  Exceptional Year 2000 costs                8.6               -        2.5
                                            _____         ______     ______
Diluted earnings per share                                                 
before exceptional costs                   316.2           342.4       92.3
                                           _____          ______     ______
                                                                           

f   Cash flow statement - reconciliation of profit before interest to
operating cash flows

                                                        2001           2000
                                                          £m             £m
                                                                           
Profit before interest                                 367.3          394.7
Share of operating profit of associates  and                               
joint ventures                                         (8.8)          (8.6)
Depreciation charge                                    267.4          252.1
Amortisation of goodwill                                17.4            6.4
Profit on sale of tangible fixed assets                (0.3)          (2.5)
Deferred income received                                 1.0            0.8
Deferred income written back                           (2.9)          (4.6)
Provisions for liabilities and charges                  12.2           67.8
Utilisation  of  provisions for  liabilities                               
and charges                                           (49.5)         (26.2)
Decrease in stocks                                       3.7           12.5
Decrease/ (increase) in debtors                          4.6         (27.1)
Increase in creditors                                    5.7            6.2
                                                      ______         ______
Net cash inflow from operating activities              617.8          671.5
                                                      ______         ______

g   Regulatory capital values

At each price review, OFWAT sets price limits which it considers will enable
companies to earn a reasonable return on capital.  OFWAT bases that return
on the Regulatory Capital Value (RCV).

The projected outturn for Severn Trent Water's RCV (after clawback for
rolling five year adjustments) from the November 1999 Determination is as
follows:

                                           31 March
£m                        2001     2002     2003    2004    2005
                                                            
Closing Value             4,070    4,150    4,376   4,653   4,930
Year Average              4,037    4,157    4,313   4,569   4,850

2   Annual Report

The 2001 Annual Report or Summary Financial Statement will be sent to
shareholders in late June.  Copies may be obtained from the Company
Secretary, Severn Trent Plc, 2297 Coventry Road, Birmingham B26 3PU.

3   Annual General Meeting

The Annual General Meeting will be held at The International Convention
Centre, Birmingham, on 24 July 2001 at 2.30pm.