Chairman's Statement

Severn Trent PLC
24 July 2001


Severn Trent AGM
Chairman's statement on current trading

Speaking at Severn Trent Plc's Annual General Meeting this afternoon,
Chairman David Arculus commented on current trading as follows:

'Our strategy for transforming Severn Trent into an environmental services
business remains on track, with all three of our principal business units
making good progress.

Unaudited management accounts for the quarter ended 30 June 2001 show that
group profit before taxation, excluding an exceptional profit arising from
the sale of Stoner, was marginally ahead of our expectations.

Severn Trent Water has continued to perform well with its programme of cost
efficiencies.  The 1100 headcount reduction announced in December 1999 has
now been virtually implemented, several months ahead of the scheduled date.

Biffa has made further progress with the successful integration of UK Waste.
Increased profit from the UK business, which now constitutes more than 90%
of Biffa's profit before interest, tax and goodwill amortisation, has offset
some continuing weakness in Belgium.

Profit before interest, tax and goodwill amortisation from our other growth
business, Severn Trent Services, was significantly ahead of the
corresponding period of last year.  Whilst there are some signs that the
issues with the US economy are having an impact upon the business, the
effect to date has been modest.

At Severn Trent Systems we have continued to experience problems in
resolving issues associated with the delivery of the CIS-Open Vision system
contracts in the US.  All appropriate steps will be vigorously pursued to
recover Severn Trent Systems' entitlements, but we now expect losses from
this business to be much higher than the £5.6 million loss reported last
year.  The additional loss is expected to have a limited impact on the
group's overall anticipated results.

Our strategy for creating shareholder value continues to be based upon the
profitable growth of our waste and services businesses and out-performance
by our regulated water business against the targets built into the OFWAT
price determination.  We remain in a strong position to achieve these
objectives.'

Enquiries:

Simon Holberton
Brunswick                                         0207 396 5347

Alan Costin
Group Finance Director, Severn Trent Plc          0121 722 4429
                                                  (From 25.7.01)