Trading Statement

SEVERN TRENT

PRE-CLOSE PERIOD TRADING UPDATE

4 April 2006

Severn Trent Plc is issuing the following trading update prior to announcing
its full year results on 6 June 2006.

The Board considers that the Group has delivered an overall encouraging
operating performance in the year, consistent with its expectations and prior
guidance.

Profit Before Interest and Tax (PBIT) for Severn Trent Water for the year is
expected to be some 30% - 35% higher than the prior year. This is principally
due to a 15.2% increase in prices, including inflation, applied from 1 April
2005. Severn Trent Water's cost reduction plans have been progressing well, in
line with management's expectations.

The anticipated Severn Trent Water PBIT for 2005/06 is stated after taking a
provision for £10.6m relating to the expected cost of the agreement made with
Ofwat arising from the regulator's interim report dated 7 March 2006 to credit
each customer account during 2006/07. See also Severn Trent Plc's announcement
dated 7 March 2006, available at www.severntrent.com.

Infrastructure renewals expenditure at Severn Trent Water is expected to be in
the region of £80m - £85m for the year. Net capital expenditure, excluding
spending on infrastructure maintenance, is expected to be around £315m for the
year.

In recognition of the fact that Severn Trent Water turnover increased ahead of
forecast, the company has held the future price increases in 2006/07 customer
bills to some 0.65% below the around 7.2% increase, including inflation,
allowed by Ofwat. This is expected to reduce Severn Trent Water turnover and
operating profit, by around £7m in 2006/07 (and in each subsequent year of the
AMP 4 period), compared to the full allowed price increases.

Biffa UK has achieved a good performance in the year in a flat market. The
first half 2005/06 PBIT improvement of 8% is expected to progress further with
full year PBIT for Biffa UK growing over the prior year by some 10% to 15%.
This year Biffa UK has benefited from a 53 week trading year, favourably
impacting full year PBIT growth by around 2%. The collection division, the
landfill division and the special waste division are all expected to contribute
to the improved profitability year on year. Biffa Belgium is expected to record
a small operating loss in the second half. This second half performance,
together with a full year operating provision for environmental taxes of £4.5m
(H1 £3.1m), is expected to lead to a full year PBIT loss for Biffa Belgium of
around £4m to £5m. Biffa's overall PBIT for the year is as a result expected to
be some 2% to 5% ahead of last year, £82.2m.

Laboratories' are still experiencing difficult conditions in the United States,
where poor underlying US market demand and price erosion have been the major
challenges. Management has continued to concentrate in the US business on cost
reduction and operational improvement, including the implementation of the new
Laboratories Information Management System. The UK business has continued to
perform satisfactorily. Laboratories' total PBIT for the year is expected to be
some 25% - 30% lower than last year within which the UK Laboratories' PBIT is
expected to be stable year on year.

Water Purification and Operating Services' total PBIT for the second half of
the year, which under IFRS excludes the contribution from its Belgian associate
Aquafin, is expected to be consistent with the £5.5m achieved in the first half
of the year. For the full year, Water Purification and Operating Services' PBIT
is expected to grow over 20%.

The PBIT loss for the full year for Other businesses, which include Systems,
Property, Engineering consultancy and Insurance, is expected to be £9m to £10m.
The loss includes the net cost of actions undertaken to rationalise and/or
dispose of the Systems and Engineering consultancy businesses.

Corporate overheads in the second half are expected to include some £8m of
additional costs, principally relating to the Group's review of its businesses,
which is the subject of a separate announcement issued today.

Net debt at the year end (excluding approximately £125m of IAS39 fair value
adjustments) is expected to be around £3.0 billion. This increase, in
comparison to 31 March 2005, principally reflects the accelerated payment of
Group dividends during the year of £66m, resulting in three dividend payments
falling in 2005/06 and also the rising level of capital expenditure in Severn
Trent Water following the start of the AMP 4 period.

The full-year results will be prepared under IFRS. Severn Trent Plc's
announcement on 19 September 2005 outlined the impact of IFRS on Severn Trent
Plc's full year profit and loss account and balance sheet and provided
important context and information relevant to this trading statement.

ENQUIRIES TUESDAY 4 APRIL 2006:

Mike McKeon                  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                                      
                                                                   
Andrew Grant                 Tulchan Group       0207 353 4200     

AFTER 4 APRIL 2006:

Mike McKeon       0121 722 4267        
                                       
Julian Wais       07899 066 242        
                                       
Peter Gavan       0121 722 4310        
                                       
Tulchan           020 7353 4200        

Footnotes:

1    The full year results will be prepared under IFRS. Severn Trent's         
     announcement on 19 September 2005 outlined the impact of IFRS on Severn   
     Trent's full year profit and loss account and balance sheet and provided  
     important context and information relevant to the trading statement.      
                                                                               
     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    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)   
     (the `Securities Act').                                                   
                                                                               
     The Board of Severn Trent has announced separately today that it intends  
     to demerge its UK waste business, Biffa UK. The decision to demerge Biffa 
     UK remains subject to shareholder and certain other approvals and to      
     further detailed due diligence. The Board expects the demerger to be      
     completed by the end of the year. The Board is currently considering a    
     number of strategic options in relation to the group's Belgian waste      
     business.                                                                 
                                                                               
     The Biffa UK shares to be distributed in connection with the demerger have
     not been and will not be registered under the Securities Act. The Biffa   
     shares have not been approved or disapproved by the US Securities and     
     Exchange Commission (the "SEC") or any US state securities commission, nor
     has the SEC or any US state securities commission passed upon the accuracy
     or adequacy of this announcement. Any representation to the contrary is a 
     criminal offence in the US.