Good morning. I'm Liv Garfield, Chief Executive of Severn Trent, and I'm delighted to be here today to talk about our full year 2024 financial results. Now, I'm in Balsall Common, as you can see from the sign behind, and you can see it's drizzly, which feels absolutely fair and just after a year of epic rainfall proportions. But we see our job as being the fact that we need to manage whatever the weather is. Come rain or shine, it is for us to make sure that our customers receive the service that they expect, and we just crack on with a smile 365 days of the year. Now, let me talk to you now about the highlights of the last 12 months.
Our first big proud moment is the fact that we're highly confident of receiving four-star status, which is the highest accolade the Environment Agency gives, for an incredible five years on the bounce. We're also super pleased with GBP 55 million worth of ODI's outperformance. We're very excited to have delivered GBP 1.2 billion worth of capital investment, our largest investment to date, putting us on a brilliant trajectory for this year and going into the next AMP. We're in such a strong position, actually, on capital; we've been able to accelerate to make it a GBP 450 million transition commitment now, which is higher than we talked about at the half year. We're also super pleased that we've gone live just in the last couple of weeks with our first carbon neutral works at Strongford, which is a world first in wastewater treatment from that carbon neutral perspective.
Now, I'm gonna head over and meet up with some of the water teams, and then we'll get involved in doing some activities at a customer's house. I'll see you there shortly.
Thank you, Liv, and hello, everyone. Today, I'm happy to share with you a strong set of financial results that reflect good operational performance, supported by a robust balance sheet, positioning us well for the coming AMP and the proposed record growth. Reviewing the highlights for the year, I'm pleased to share that as a result of our largest ever year of capital investment, we have added GBP 1 billion to the RCV, providing a great platform for future returns. Importantly, our balance sheet remains strong as we prepare for the future growth, with Ofwat-defined shadow gearing of 59.7%. We have delivered a strong cumulative ROERI of 8.1%, driven by sector-leading ODI performance and a financing strategy that has delivered continued outperformance through periods of high and low inflation.
That performance, together with PBIT of GBP 512 million, has delivered 36% adjusted EPS growth after accounting for the additional 46 million shares from our GBP 1 billion equity raise. And finally, our proposed full dividend for this year is GBP 1.1684, in line with our policy. Now, looking at PBIT in more detail, revenue is up as a result of the inflationary increase, our green recovery allowance, and ODIs earned in previous years flowing through. In total, this has increased revenue by GBP 157 million. Our bad debt charge as a percentage of revenue has reduced slightly to around 1.5% of household revenue. As we guided to previously, there have been above-inflationary cost increases, the most significant of which is power, which reflects prior year prices, but also the impact of the two-year pay deal for our employees, as well as business rates and regulatory fees.
However, we are seeing positive signs, with power costs reducing in FY 2025, as well as other areas such as chemical costs. Investing for the future is a crucial focus, which is evident with GBP 32 million of OpEx investment, which relate to green recovery, insourcing of critical waste activities, as well as investing in our workforce to prepare for the growth ahead. In the year, we've seen a significant increase in wastewater volumes, which has increased our power consumption, tankering, and labor costs, bringing our regulated PBIT for the year to GBP 480 million. Important to note, we have worked hard at driving efficiencies to offset these cost increases, such as our procurement team delivering commercial savings, investing in reducing energy consumption across our network, and reducing the cost per kilometer of mains renewal.
As you know, we've been investing in energy generation for a long time in both our regulated and non-regulated businesses. In the last four years, we have grown our generation by 34%, meaning we are now generating 60% of our total energy needs. Green Power have grown energy generation by 17% over the course of the AMP through development of existing assets and acquisition of new sites. For the same time period, Bioresources have grown generation by 55% through investment made in AMP6 and early in AMP7 in thermal hydrolysis, and our focus on importing waste from other companies when they don't have the capacity. This provides us with material, additional cash flows, and protection against changing energy prices, whilst also supporting us to achieve net zero by 2030.
This year, our finance costs have reduced by 22%, with the effective cost of interest at 4.7%, down 150 basis points, mainly reflecting the reduction in inflation. The effective cash cost of interest is up by 20 basis points, driven by an increase in interest rates. During the year, we raised GBP 1 billion of equity to fund future growth, enabling us to submit a plan with all equity requirements fully funded. GBP 600 million of the proceeds have now flown through to the regulatory business, and this is reflected in our shadow RCV gearing of 59.7%. It is worth noting that this gearing would be around 55% if we included all of end of AMP RCV adjustments earned to date and the remaining GBP 400 million of equity.
With around two-thirds of our debt at fixed rates, we have a good degree of visibility on our financing costs, and we expect to continue to have one of the lowest costs of debt in the sector. Over the first four years of the AMP, we have outperformed the iBoxx, and while that has been tougher in the last 12 months, I'm pleased with our success in raising finance this year, with a number of well-priced debt placings enabling us to maintain our strong liquidity position. This included our first Eurobond in over a decade, of EUR 500 million, which was raised under our sustainable finance framework. Our ESG credentials have been further strengthened as we increased our EU taxonomy alignment for CapEx from 62%-83%, reflecting our higher investment in waste and increasing the scope and granularity of our climate adaptation risk planning.
We continue to deliver outperformance on RoRE, with 4.2% above the base return across the first four years of the AMP. The first component of our return is ODIs, where we have delivered a further GBP 55 million in net rewards this year, reflecting continued sector-leading operational performance. We have consistently delivered financing outperformance in each of the last eight years, in both high and low inflation and interest rate environments. We are ideally placed to continue this into the next AMP. Our RoRE also includes 0.6% related to tax, although, of course, a large proportion of this will be trued up at the end of the AMP. We expect to be around 1% higher than the TotEx allowance by the end of this AMP, which largely reflects energy prices, as previously guided, and also the reinvestment of some RoRE outperformance into projects that will deliver AMP8 benefits early.
Our record year of capital investment, combined with the benefits of inflation, mean we have added an additional GBP 1 billion to our economic RCV this year, bringing the full value of our RCV as at the 31st of March 2024 to GBP 12.5 billion in current prices. This includes Green Recovery , AMP8 transitional spend, as well as other midnight adjustments that have been earned to date in AMP7. As we look ahead to the end of this financial year, we expect to grow our AMP7 RCV by around 40% in nominal terms, before accounting for GBP 450 million of investment being accelerated from AMP8, where we will see our largest-ever capital investment program. Altogether, this would mean our RCV roughly doubles between 2020 and 2030, providing a strong platform for future returns.
I won't go through each line of our technical guidance, but I just want to highlight a few key points. First, we expect operating costs and IRE to decrease year-on-year, largely as a result of lower energy prices and a reduction in HS2 diversions work. On ODIs, we expect to deliver net rewards of over GBP 100 million, which includes in-period ODIs and end-of-AMP ODIs we previously guided to. Due to the strength and breadth of our outperformance on ODIs, we will hit the cap in both water and waste in year five, and post-customer sharing, we expect to deliver therefore around GBP 60 million, although the final number will depend on the mix of those rewards. This will take our total AMP7 ODIs in nominal prices to around GBP 420 million after sharing.
And finally, I can also guide to another record year in capital investment of between GBP 1.3 billion and GBP 1.5 billion for the Group. And with that, let me hand back to Liv.
Thanks, Helen. Now, just before we get to the customer's house, I wanted to stop off on the way and actually just show you this storm overflow, the most local one to the house we're going to next. Now, this is just one of 2,472 storm overflows that make up the Severn Trent network. Now, they do a critical job in protecting customers' homes and businesses from flooding and extreme weather. But even though that's the case, we know something's got to change. We need to get more creative, more innovative, with a whole range of much speedier solutions. So as you know, back in 2022, we actually went out and made sure that we had monitors at all of our CSOs.
Since then, we've been getting our engineering teams to really work hard at understanding and visit every single site and find the perfect plan in the short and the long term to reduce the spill count to every single one of those CSOs. Now, we know how mission-critical this is to the sector right now, and that's why we're so pleased that we've been able to increase the amount of money we're spending on this critical topic to GBP 450 million over an 18-month period. And in addition to that, we were able to make a big, bold commitment the other day that we intend to actually land capital schemes between now and Christmas at around 900 sites.
Now, to bring that to life, to show what that means in reality, I'm gonna hand over now to a video where colleagues bring to life the various different capital investments, the array of different schemes we're thinking of, whilst I make my way to the customer's house to do the water quality sampling.
Rivers transform the communities around them, and we want to do more to take a leading role in making all our rivers the healthiest they can be. Today, our operations account for 14% of RNAGs in our region, and storm overflow spills account for about 3.5% of waste RNAGs. Storm overflows were designed to protect homes and businesses from flooding when it rains. They release excess flow during heavy rainfall, a large proportion of which is rainwater from built-up areas and roads. But as important as they are, we need to tackle spills. We've already been hard at work getting into a position to make a real difference. Since 2022, 100% of our storm overflows have been monitored, and we recently published an EDM map giving real-time data on their usage.
That gives us a rich set of data to understand what we need to do to dramatically reduce spills. The GBP 1 billion of equity we raised last year, and the ability of what have given us to accelerate transition spend two years early, means we can now address spills faster. We're doing that using our separate store treat approach across 900 of our top priority overflows this year, which is over a third of all our overflows. That involves separating rainwater and sewage where we can, using sustainable urban drainage programs like these detention basins we've installed in Mansfield as part of our Green Recovery project, or the 8,000 water butts we're trialing in 10 communities in our region.
It involves building more storage across 700 sites this year to take water during heavy rain, from solutions at smaller sites, like this one at Hurley, to larger sites, like this storm tank at Stroud, which has smart controls to hold around 7.4 million liters of water during storms until it is safe to treat. We're also making use of latent storage on our network, like this example of a weir raise in Coalville, a quick and simple solution which we expect to halve the frequency of spills from the overflow, and it involves treating more water than ever before, introducing further treatment processes. We're adding more than 70 reed beds, like this one in Fenny Compton, to provide nature-based treatment of water, and we're adding 25 treatment units, like this example from Dorrington, to allow us to take greater flow of wastewater through the works.
All of that will help us achieve our target of averaging under 20 spills by 2025, but we won't stop there. We are planning to invest GBP 1.1 billion by 2030, making improvements at almost every single one of our 2,472 storm overflows. Our new Zero Spills Hub has begun trialing innovative new ways in reducing spills, and we're working collaboratively with Aarhus Vand, who are world leaders in this space, to develop and test technologies. This will all help us halve our number of storm overflow spills by 2030. Reducing spills is our number one priority. The work we've done so far has given us a detailed plan of action to tackle spills faster, and we're going to keep everyone updated on our progress as we complete work on the 900 sites through the year.
So you can see that I've made it all the way over to the customer's house, and before we actually go inside and take the sample, I want to start by talking about capital investment for the year. It's been our biggest ever capital investment year at GBP 1.2 billion. That's 62% up year-on-year, and that's been in a whole range of activities, but of course, including our 50,000 km of water pipes from all of our treatment works down to every single customer's property, like this very one, across all of the Midlands. Now, when we think about capital investment, people often think about hundreds of millions of GBP on huge mega schemes. Actually, Severn Trent is typically different. It's actually lots and lots and lots, hundreds of thousands, of much smaller schemes, normally under 20 million GBP.
And we're primed ready for the next AMP. When you look at the work that we've done, whether it's the equity raise last year to get ourselves ready on transition spend, whether it's Green Recovery, which has helped us get to that run rate of GBP 1.2 billion, allowing us to glide seamlessly into the next price review at exactly the right run rate, we can see that all of our efforts are really beginning to pay off to get ourselves into that shape. We've done a lot, whether it's digitalization of design, whether it's the Plug and Play, which we know is going to be brilliant for speedier and quicker and faster and cheaper delivery of our capital assets, whether it's the standardization that we've leaned into, or whether it's actually the expanded supply chain and the in-house insourcing of much of our capital work.
All of that puts us in brilliant shape and ready for the future. Now, on that, let's head in and take the sample. I've got the bag. Let's go and see the customer. The great news is the customer said we could come in and take the sample. Now, when we come and do samples, we actually normally do five samples: conductivity, chlorine, turbidity, taste, and odor. Now, today, I'm going to show you live on camera how we do the chlorine test, and I'll do the others off-camera before we finish. Now, first of all, just wash our little vial, just to make sure that there's nothing pesky just hiding in there. There we go. That looks perfect. Then we fill it up, and we've got to check that our machine is working to exactly the right standard. So with the machine, we check it's reset. Very good. Perfect.
We then put it in as a first of all, just literally just with the tap water like that, and then we go ahead and we check it. We want to check that there is a zero read on that. And what have we got? We've got... Perfect, that is zero. Having done that, we're then in a great position to add the different formulas to it. So we add the two solutions, three drops of each. one, two, three . Perfect. What we're then going to do is gently mix it. I'm told about five rolls is perfect. three, four, five . We then place it back into our clever machine, put the top back on, and what we're looking for is between 0.2 and 0.7. So we're just waiting for that to come through.
And excellent news, it's come out at 0.34, which is absolutely excellent. Now, just whilst we're talking about water, water as an entirety, let's just look at our wider water performance, and we've had a really strong year, and it's because we've actually overinvested for best part of the last decade, and the hard work and efforts are really paying off. We've seen 80% of our metrics are green in water this year, and that's led to a GBP 35 million ODI outperformance just in water alone, which is brilliant. We're also super proud that we've seen a whole series of best evers, best ever supply interruptions, in low pressure, and in leakage as well.
Now, leakage we know to be one of those big topics within the sector, and we're super proud of the fact that over the course of the last four years, we've actually reduced leakage by just shy of 11%, well on track for the end of AMP target of 15%. And in doing that, one of the things that we've had to do is dramatically improve and increase the amount of jobs that we do each year in terms of finding smaller leaks quicker and being able to solve them. We've seen a 50% increase in the number of leaks that we've been out working on. Now, let's now empty away this sample and begin to talk about wastewater. So I'm pleased to say we've now done all of the samples.
The tests we can do on-site all passed, which is excellent news, and I've got to take this back to the van a second and get it over to the labs, where it'll be further tested for the remaining tests. Now, it feels as we've just been literally washing away some of the samples into the drains, perfect timing to talk about our wastewater performance, and we've had a really strong year across the piece. We're absolutely delighted with our four-star status looking to be confirmed again in July, highly confident of that being the fifth year on the bounce that we will be named as sector-leading with four-star status. It's incredibly hard to land the accolade. You have seven very, very stretching targets across a whole range of wastewater metrics, and I'm super proud of the teams for their efforts in that continued outperformance.
We've had our best ever performance actually on blockages, and of course, disappointing performance on external sewer flooding, but more that we can do, and now that we've insourced our activities, we feel confident we can continue to make continued improvement in that space going forward. Now, we feel in really good shape for the next AMP. We've been proud of the fact we've been frontier in waste for a long period of time, and we're confident of continuing that strong performance as we head into AMP8. Now, with that, I've got to take this bottle, get it straight into the fridge in the van, ready to be looked after.
But actually, what I thought I'd do now is to hand over to a video, which brings to life all of the lab and the testing capabilities to show what happens next to this fantastic bottle of water.
Here we are at Church Wilne, near Nottingham, home of Severn Trent's newest laboratory, a state-of-the-art facility for water testing. It's one of three dedicated labs within Severn Trent Water that operates every single day, testing water from around our region. Our team of 70 water samplers and 14 couriers are out 365 days a year, wind, rain, or shine, making sure our water is perfect for our customers. Each week, samples from 134 treatment works and 527 service reservoirs are tested alongside samples from around 500 customer homes. This lab alone generates over 1,000 results each day to make sure that the water flowing through our pipes and into our customers' taps is of the highest quality.
The samples from homes and treatment works are collected by our courier network from hubs across the whole region and brought to the laboratory for analysis. The samples are receipted onto our computer systems and taken through to our air-controlled labs, designed to prevent any contamination to the samples. Once there, the samples can be checked for a range of different bacteria. The samples are filtered to trap any bacteria that are present. The filter paper is then incubated in different media before it's taken out to see if anything has developed. Here at Church Wilne, we've recently started using a new technique to generate results for certain bacteria faster, reducing the incubation time needed from 18 hours to just minutes.
Through all this process, we work closely with the Drinking Water Inspectorate, who set the standard for the sector, making sure water quality in the UK is one of the best in the world.
So I've got my sample, and now I need to make sure that we keep it nice and cold in the lovely fridge in our electric vehicle. Okay, that's in there, all sorted. Now, going on about electric vehicles, do you remember that we said a while back we wanted to do the Triple Carbon Pledge? And one-third of that big commitment was to make sure that we got to an electric fleet by 2030. I'm delighted to say that actually, about a quarter of all of our fleet now has moved to being electric this year, so we're making some really good progress along the way. And sticking with those wider environmental activities, Green Recovery continues to progress at pace and looks to be in fantastic shape to complete in year five of the AMP.
We know how important river quality is, and that's why we're delighted to see the improvement in our RNACs, so they're actually reduced down to 14% this year, and we're confident of being under 10% in a year's time. We know that biodiversity is huge. Post-COVID, nature is right at the heart of lots of conversations, and so you might remember, a year ago, we upgraded our commitment in terms of our contribution to biodiversity across the UK. We've gone and smashed that target actually a year ahead of plan, and we now contribute 2% of the whole nation's nature recovery network, which is absolutely brilliant in terms of 10,000 hectares of land. And last, but absolutely not least, of course, this is the year we've delivered the very first net zero investment from ourselves into Strongford.
We've actually created the world's first carbon-neutral site in one of our largest wastewater treatment works, and we're super excited that all those technologies are really performing to plan and giving us a brilliant blueprint to get ourselves to operational net zero by 2030. Now, I need to tidy away my stuff, then begin to make a move onto my next customer job. Let's pack it all away. Right, then, so let's begin to get ready to close, and before I do, I want to start by saying thank you to my wonderful colleagues. I want to...
Literally every day of the year, 365 days, Boxing Day, Christmas Day, Easter Sunday, whatever the day it is, we've got people out and about managing the Severn Trent network and looking after customers, and I truly appreciate the efforts that they give and the commitment and dedication they demonstrate. I try with these results videos to bring to life just some of the activities that take place that maybe people just don't think about when they think about turning on the tap and having that lovely, pristine water. Now, colleagues this year have continued to be properly committed to the organization. In actual fact, we've had our highest-ever engagement scores, which is something I'm super proud of. I believe culture to be the greatest quality that a business has, and I think Severn Trent has wonderful culture in spades.
We also want to make sure that we support our customers in everything they do, whether that's service, whether, of course, that's also helping in wider activities. And two big things that we've done this year that we're proud of is, of course, the affordability work, supporting vulnerable customers that are financially struggling with their bills, and going even further with the societal strategy work, a 10-year commitment, a campaign that is something we're all very focused on, to try and transform 100,000 lives in the Midlands region, to try and bring those people out of poverty and to help them with a genuine shift in their quality of living. Now, with that, let me begin to get ready and head to the next customer. So just to wrap, two dates for the diary. The first is the 12th of June, the day of the draft determination.
I'm sure you've already got it in your diaries. The second is the 20th of June, when we're going to do a webcast to share our thoughts on the Severn Trent draft determination and to answer any questions you might have. Now, whilst that is exciting, those two dates, for those of us that are a little bit into our regulatory detail, I guess I want to reassure you, for the vast majority of Severn Trenters, they're just new... other days at the office. At the end of the day, we've laid out the five big bets.
We've shared with them what we want to focus on with the investment and the early transition spend, and we've been really clear, this is what we think good looks like going into the next AMP, and they are all clear and working their socks off to make sure we start in a brilliant position. Now, that's it from me today. I hope you've enjoyed the video, but don't forget, we've now got a webcast with some Q&A, with all of my senior team on it as well, so you'll be able to ask any questions about this year's financial results.