Good morning. I'm Liv Garfield, Chief Executive of Severn Trent, and this is our full year results 2020 to 2021. It's a little bit different today. We're coming to you from our academy. This has been a scale investment for us over the last 12 months, and we're super proud of it. It's a testament to our culture. It's an opportunity for us to develop our people. It's an opportunity for us to give back to our communities in terms of employability skills. We're looking forward to taking you around in a second to bring it to life. In the meantime, let me share with you the highlights of the last 12 months. It's been a really strong year operationally. We've done well across the board in waste, in water, in customer, and environment.
That's led to a fantastic GBP 79 million worth of ODI awards in the first year. We said our fast start status would make sure that we'd start strongly, and we'd come out of the blocks quickly, and we've done that also on capital investment with a GBP 90 million worth of acceleration in the first 12 months on areas like the Water Framework Directive. That's led to a strong RoRE performance. 190 basis points outperformance in the first 12 months. It's been a year of very much in line with expectations on the financials, a resilient situation, and building ourselves strongly with a strong foundation for the future. We're absolutely delighted to have received the go-ahead and the green light from Ofwat for a Green Recovery investment of GBP 565 million.
We think there's gonna be some really innovative solutions that will make a real difference to our region and to our customers. With that, let's go indoors and take a sneak peek. I'm now in our main conference room. This is where we're gonna be doing the Q&A in just a little while. Before we carry on with year end, I wanna talk to you about the Green Recovery in a little bit more detail. Now, I think the slide largely tells you the story and why it makes sense from the point of view of us as a company, but also how we're really helping our region bounce back better after the pandemic. What it means is, alongside an impressive RCV growth, we'll also be creating 2,500 jobs in our region.
Now, the news this morning, of course, is all about our GBP 250 million equity placement. You'll have seen our RNS this morning giving more detail about that. Let's move on now to talk about exactly how we're gonna do that. James will take you through the details for the placing as part of his presentation, but I wanted to share with you some of the details about the truly innovative plans that make up the Green Recovery announcement. Now, in fact, Ofwat told us the reason why we were so successful is because we came up with such novel ideas, real potential game changers for the industry. Now, though we've earned the rights to invest because of our strong operational performance over the AMP, and because we've already got strong, resilient financials, nonetheless, we've still gotta really make this happen.
Our success with Green Recovery will give us a big bump in our RCV of 6.6%, so we're delighted to get approval. We're starting to begin to recruit people, and it won't be long before we're starting to get plenty of spades actually in the ground. It's not every day we get approval to move on to new, exciting areas to the tune of a GBP 565 million investment pot. Now, when so many of the projects are complementary, it also makes it even more exciting. I wanna talk about just a couple of my favorite ones. We've got a really fab project to protect Mansfield from flooding. It's gonna use loads of natural solutions like drainage ponds and rain gardens. Another of the projects is we're gonna decarbonize enough new water resources to supply a city the size of Derby.
Again, a really, really exciting development for the future. Now, hopefully, that's whet your appetite just a little bit. With that, I'm gonna hand over to James to talk through our financials.
Thank you, Liv, and hello, everyone. Today, I'm pleased to report resilient results for the full year, which demonstrate the strong start we've made to AMP7 and position us to succeed both operationally and financially in the future. Let's turn to the highlights of the year just past. Group PBIT of GBP 473 million, while down on last year, was in line with our expectations, reflecting the rebasing of tariffs in PR19, the anticipated reduction in revenue from the COVID-19 lockdowns, and additional investment to drive our customer ODI performance. We've maintained a strong liquidity position and recently signed a new GBP 1 billion sustainable RCF. Despite the pandemic, our cash flows have remained strong.
Thanks to recent keenly priced debt issuances and the impact of low inflation on our index-linked debt, our effective interest cost fell a further 30 basis points to 3.4%. We made a fast start to our AMP7 capital program, continuing our momentum into the H2 of the year, with investments in key strategic schemes that will reduce service risk today and deliver cost and carbon benefits in the future. As Liv mentioned, we've had our best ever year on ODIs, which together with continued outperformance on financing, has translated to a RoRE of 5.8%, outperforming the base return by 190 basis points. Turning now to regulated water and wastewater revenue. Reported revenue was down 0.8% this year, but this movement included a PBIT neutral accounting reclassification, which you'll see was offset in other costs and IRE.
On an underlying basis, revenue was down about 2.8%, reflecting a negative K factor as a result of the price review and a net GBP 50 million shortfall from COVID-19, as lower commercial consumption was partially offset by increases in domestic usage during the national lockdowns and the dry summer period last year. It's worth remembering that the regulatory mechanism allows us to recover this revenue shortfall later in the AMP. PBIT for our regulated water and wastewater business was GBP 452 million, in line with our expectations, with the decline primarily due to the lower revenues just outlined, additional investment in customer ODIs, expected increases in power and chemical costs, and our response to COVID-19. Looking at some of the detail.
Net labor and hired and contracted costs increased by around GBP 17 million, reflecting the annual pay award, the insourcing of capital design activity, and investment in our operational performance, which has delivered a fantastic return through the ODI line. Power costs have increased as expected, owing to the rise in pass-through charges, partly offset by an increase in self-generation. We've seen higher chemical prices and volumes to meet tighter AMP7 effluent consents, as guided. Other costs this year included our GBP 6 million contribution to the new Ofwat Innovation Fund and GBP 3.5 million for extra COVID-19 support for community groups in our region. Excluding the accounting charge, IRE spend was lower, as we lapped a very busy end of AMP period last year. Bad debt costs were down by GBP 2 million, thanks to improved collection performance.
Let's take a look at this in more detail on the next slide. Now, last May, we spoke about bad debt being a risk for the year ahead. I've been really pleased to see an increase in household collections by GBP 61 million this year, enabling a reduction in our bad debt charge from 3.2% to 3%, even after increasing our COVID-specific provision, the expected impact of future unemployment by almost GBP 10 million. This success has come from three key initiatives. First, with direct debits now accounting for 68% of collections, and with new digital contact and payment channels, we've made it easier than ever for our customers to keep up to date with their water bills. Second, we've used new data-driven approaches to refine our collection activities and improve the accuracy of our billing.
Third, we've doubled the number of customers we now help through our affordability schemes. Turning now to our business services division. Turnover and EBITDA are unsurprisingly both down due to the impact of COVID-19, particularly in the H1 of the year. However, performance improved markedly in the H2 , and as you'll see from our guidance, we expect this recovery to continue. Operating services turned in a robust performance from stable long-term contracts with the MOD and Coal Authority. Our green power business was impacted most by the pandemic, particularly from lower export energy prices in the H1 of the year and commercial food waste shortages as pubs and restaurants remain closed. However, the business is already returning to solid growth as the economy emerges from lockdown.
Our new Derby plant also ramped up to a good operational performance in the H2 , contributing to the group's total renewable energy generation of 510 GWh. That's equivalent to 53% of our consumption. Property profits were lower this year, as guided, as we lapped the Teal Close employment land sale in the prior year. We've now made GBP 35 million in property profits since 2017. We're forecasting higher year-on-year proceeds next year and remain on track to deliver GBP 100 million by 2027. Now, turning to the next slide. Our effective interest cost has continued to fall as we've raised new debt at average pricing inside the iBoxx nominal allowance and benefited from low inflation on our index-linked debt.
We're now at 3.4%, 30 basis points lower than last year, which helped us to deliver another year of RoRE financing outperformance. Turning now to our financing strategy. We've continued to strengthen our position in the second half with some new, innovative debt issuances that help us maintain a balanced debt portfolio, putting us in a good position for future outperformance. Despite another year of significant capital investment, our net debt increased only marginally from last year to GBP 6.4 billion, with regulatory gearing up just 10 basis points despite the drag of the past year's low inflation on our RCV. Through the early uncertainty of the pandemic, we remained focused on maintaining strong cash flows and a prudent liquidity position. As lending markets eased, I was pleased to be able to refinance our RCF on favorable terms within our sustainable financing framework.
Let's turn now to pensions. Our decision mid-AMP6 to increase the ratio of hedging assets has provided an effective offset to this year's challenging market movements and changes in actuarial assumptions. The scheme's equity assets have also performed well this year, despite volatile conditions. Now, you'll recall at the end of last year, I advised that a lower long-term inflation forecast and a temporary spike in corporate bond spreads had flattered the year-end accounting position. We saw this unwind in the first half of this year, and so our deficit increased year- on- year. The long-term trend is downward, and our journey plan is on track. Our actuarial valuation is much less volatile, and so we'll continue with our planned annual contributions through AMP7. Let's turn now to our technical guidance for 2021/2022.
Now, I'll leave you to read the detail, but there's a few key areas I wanted to highlight. In regulated water and wastewater, turnover will be higher year-on-year by between GBP 90 million and GBP 120 million as we recover from the pandemic and also recognize an extra GBP 50 million of diversions income related to the construction of HS2. We expect operating costs to be higher year-on-year, but in line with our AMP7 TotEx plan, driven by a planned step up in our IRE program, further upward pressure from energy pass-through costs, and tighter effluent consents, increasing chemical costs. We expect to continue outperforming on ODIs, but recognizing a best ever performance this year and tougher performance commitments next year, we're guiding to at least GBP 40 million for the coming 12 months.
On tax, the super deduction capital allowances are likely to fully offset our current tax liabilities in the year. Finally, we've updated our CapEx guidance to include the Green Recovery investment to between GBP 550 million and GBP 650 million for the year. As you'll have seen, we've announced today the launch of an equity placing of GBP 250 million or around 4% of existing market cap. That will enable us to make a fast start on our Green Recovery investment. The GBP 250 million raised represents 40% of the GBP 624 million award in nominal prices, with the balance of funding coming from new debt over the remainder of AMP7 as investment requires.
This is in line with the notional gearing ratio, and together with the 15% of the Green Recovery award funded through revenue in AMP7, it will help maintain our existing capital structure and keep our credit metrics stable. As Liv mentioned, we're delighted with the opportunity to invest in innovative projects that will drive material benefits for all our stakeholders, increasing our real RCV growth in AMP7 by 6.6 percentage points, creating 2,500 jobs, and improving the natural environment in our region. To sum up the first year of AMP7, we've made a fantastic operational start with excellent performance across all price controls, resulting in a best ever customer ODI reward. We've delivered group PBIT of GBP 473 million, in line with expectations. Our financing position is strong, with our effective interest costs falling to 3.4%.
We've secured an exciting opportunity that triples our AMP7 RCV growth to over 10% through the Green Recovery plan. We're pleased to confirm our full year dividend in line with our AMP7 policy and growth by CPIH for next year. With that, I'll hand you back to Liv.
Thank you, James Jesic. Now I'm live in our rig room, which is where we bring all of our colleagues to learn about the network, about tools, and brand new techniques to make sure that we're as technically competent as we can possibly be. Now, we think it's an amazing resource, one that we think is gonna be a differentiator for us for the future. When we look at our groundbreaking experience in ODIs this year, we believe it's a result of all the hard work we invested in AMP6 beginning to pay off as we've moved into AMP7. We're really pleased that performance is across all four of our areas, whether it's water, waste, the environment, or customers.
Now, before we begin to talk through each of those in detail, I just wanna also highlight the fantastic progress we've also made this year on both cost efficiency, getting ourselves ready for the future, but also bringing down our carbon. We're confident of being on track for our net zero ambition by 2030. With that, let's head now into one of our water quality classrooms and take a little look at our performance this year in water. It's in classrooms like this where we educate our colleagues about our waste and our water networks and areas such as water quality sampling. Every single day, we place into the network two billion liters of clean treated water, and we take away 3.2 billion liters of wastewater.
Now, we're really pleased with the fact that we focus on the measures that our customers care about most, and our water performance this year has been really strong. We've seen a 60% improvement on the Water Quality Risk Index. We've seen a 10% improvement on water quality complaints, building on our strong end to the last AMP. We've delivered our leakage target and are ahead of that actually by a couple of percent. But we know there's more to be done, and that's why we're proud to have also placed in an extra 80,000 meters, meaning our customers can get even more water wise for the future. It happens every day for our Welsh customers.
We've seen a real step change year-over-year in performance and made really strong progress, for example, on one measure, which is the lead-free Wales measure, where we doubled our performance in the first year versus the target. Let's go this way. We're super proud of the fact that we're the sector leaders on waste. We've had a really strong first year in spite of pretty challenging weather conditions. Our integrated approach means that we've seen a really significant record best year ever on pollutions, we've seen a further fall on sewer flooding, and we've also seen a stellar performance on blockages with a whopping 30% reduction year-over-year.
At our half year results, we talked about Blockbuster, our program that was taking data, really understanding trouble hotspots and targeting them, making sure that we help before our customers even experience an issue, and that's really paid off for us. Now, we don't wanna rest on our laurels. We know that this holistic approach towards looking after blockages to sewer floodings to pollutions is a real success factor for us, but we want to invest more for the future. We want more eyes and ears, and that's why we've invested in 1,500 sewer sensors over the course of this first year, and we're gonna increase that to an incredible 40,000 sewer sensors by 2025. We know that will help us to spot things early, find them, fix them, and again, help our customers quicker.
Now, with that, let's move on now and talk about the environment. Taking things through an environmental lens has become second nature to Severn Trent, and it's why we built the academy. We built it in a very eco-friendly manner. Being in and out of lockdown over the last 12 months has definitely taught us how incredible the natural environment is, and that's certainly true for us at Severn Trent. What's good for nature is good for water. It leads to cleaner rivers, leads to less chemicals, leads to less treatment costs, and of course, leads to a better end product for our customers. It's why we're so passionate about biodiversity as a topic. It's why we've really gone bold on the Green Recovery schemes. It's why we've worked so hard on self-generation using renewable energy sources for the last few years.
We're pleased to have seen that increase by a further 2% this year to 53% of our energy self-generated. Let's now go to a video to really bring to life our environmental credentials. There were some really lovely things, I hope you thought, in that environmental video. Now that takes me seamlessly on to customers. We've really worked hard over the last 12 months to provide even more support than ever for customers at a time when they probably need it most. One of the things we've just recently launched is our employability activities, where at the academy, we're gonna help provide 100,000 hours of employability support for people in our region to assist them in gaining jobs for the future.
Let me now pass over to Hilary Bennett, our Head of Customer Contact, to talk about all the other areas we've done over the last 12 months to support customers.
I'm Hilary Bennett, Head of Customer Contact. The last 12 months have been really hard for everyone, and we know that our customers are no exception. We have made sure that we've made it easier than ever for them to make contact with us. We've reached out to those customers who are struggling to pay and made sure that it's very easy for them to access our financial support. Last summer, we launched Back on Track, a scheme specifically designed to help those customers new to debt due to COVID. All of our financial support schemes are really easy to access via digital applications. Quick and easy for our customers to access that financial support. Through all of those schemes, we have managed to help over 150,000 of our customers who are struggling to pay.
We've also increased the number of customers on our priority services register. In fact, more than doubled the number of customers that we are now able to give a little bit of extra support just when they need it during a water and waste incident. We accelerated our focus on new channels and opened up WhatsApp and two-way SMS, which allows our customers to contact us 24/7 on a channel that suits them. In fact, over 250,000 of our customers have used those new channels and given us a brilliant nine out of 10 on customer satisfaction. We've invested in technology and delivered a great new telephony platform that brings with it new tools to allow us to truly understand our customer contacts. Things such as speech analytics that will allow us to build our service to match their needs.
We really care about the service we offer and pleased to be improving in the customer space with net reward for C-MeX and D-MeX, and we were thrilled to find ourselves in the top five utility companies for the UKCSI, and so proud that we were the most improved water company.
We see the academy as an investment in people rather than bricks and mortar. One of the most special things about Severn Trent is our people and their adaptability, and never has that flexibility been more important than the last 12 months. Whether it's been colleagues working at treatment works, out in the network and streets, in customers' homes, in offices, or unexpectedly from home, they've all risen magnificently to the challenge and done an incredible job to support our customers during one of the most trying years. Now, as well as doing our job really well and operationally strong, we also wanted to help our communities out as much as we could. That's why we donated GBP 3.5 million to charities and good causes that we know had a really positive impact in our region.
It's also why we looked to step in and actually offer a number of online lessons, 750 online lessons, in fact, when parents were working from home and struggling to cope with children as well as extra life. Across the piece, we think it's been a really strong year for us in this community sense, but let me hand to a video now that brings it to life. That's it. It's certainly been a year to remember. Hopefully for many of the right reasons. We've started the AMP strongly operationally. We've delivered GBP 79 million worth of ODIs, and we've done it in balance across waste, water, customer, and the environment. We've had a resilient performance financially. We've delivered in line with expectations, and that gives us a strong platform for the future.
We've got the fantastic green light from Ofwat to invest in our Green Recovery schemes, which are innovative and also provide fantastic employment for our region with 2,500 direct jobs as well as protecting many more thousands in the supply chain. Through all of this, we've looked after our people, we've looked after and supported our customers, and we've enhanced our natural environment. With that, I think it's time to open up for questions. In the room today, I've got James, Helen, James Jesic, and myself. We hope you've got a few questions for us.