Trading Statement

SEVERN TRENT PLC

TRADING STATEMENT

2 October 2007

Severn Trent is issuing the following trading update prior to the announcement
of its interim results on 27 November 2007 for the six months ended 30
September 2007.

The Board considers that overall the Group has delivered first half-year
performance that is broadly consistent with its expectations for the full year.

Water and Sewerage

Sales prices have increased by 5.87% (including inflation) from 1 April 2007.

However, whilst the wet weather conditions seen over the recent summer months
have had a beneficial effect on reservoir levels, they have also reduced
consumption levels. As a result, we expect full year revenues to be around £12m
lower than we would have anticipated.

Severn Trent Water continues to focus on the operating cost challenge of the
AMP4 contract. The flooding incident in July has caused some delays to the
delivery of our plans in this current year, but we are not changing our overall
outlook in respect of operating costs. We remain on track, excluding
exceptional flood costs, to meet the Ofwat determination for operating costs in
2007/08. This is helped by the fall in energy prices (with prices now fixed for
2007/08, our total energy costs will be around £17 million lower than 2006/07),
and some initial benefits coming through this year from our improvement plans.
These improvement plans are gathering pace and will deliver benefits in the
years to come.

Severn Trent Water's infrastructure maintenance programme and rate of
expenditure are progressively increasing through the year. As a result, first
half infrastructure renewals expenditure for 2007/08 of around £46m to £48m is
expected to represent around 40% of the total net expenditure for the year.

Gross capital expenditure under UK GAAP, (including infrastructure maintenance
expenditure) is expected to be around £560m for the full year 2007/08, with
expenditure in the first half of around £250m.

Water Technologies and Services

This business continues to make good progress. Total PBIT for the first half of
2007/08 is expected to be around the result achieved for the second half of
2006/07 (£10.7m).

Corporate and Other

We have completed the integration of the head office and Severn Trent Water
teams and now have one executive team headed by Tony Wray, Chief Executive (see
today's separate announcement), focused on our core water activities. As a
result of this integration, we expect to reduce our recurring overhead costs by
between £6 million and £10 million by 31 March 2008.

Impact of July 2007 Floods

As we announced on 8 August 2007, we estimate that the gross economic cost of
dealing with the incident is likely to be in the range of £25 million to £35
million. However, we expect that this will be partially offset by insurance
recoveries of between £10 million and £20 million.

Group Net debt at the half year (excluding IAS 39 fair value adjustments) is
expected to be around £3.2 billion.

ENQUIRIES:

Mike McKeon                    Severn Trent      0121 722 4319     
                                                                   
Group Finance Director                                             
                                                                   
Jonathan Davies                Severn Trent      0121 722 4295     
                                                                   
Head of Investor Relations                                         
                                                                   
Peter Gavan                    Severn Trent      0121 722 4310     
                                                                   
Director, External Affairs                                         
                                                                   
David Trenchard                Tulchan           0207 353 4200     
                                                                   
Peter Hewer                                                        
                                                                   

Footnotes:

1    The financial statements presented have been prepared in accordance with  
     IFRS, as endorsed by the EU, 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 49 to 53 of its 2007 Annual Report.                                 
                                                                               
2    PBIT is profit before interest and tax and excluding exceptional 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.