Severn Trent has increased its dividend to more than £260m, despite growing public anger over payments made by water suppliers to their shareholders and executives, as companies come under increasing pressure to tackle leaks and sewage pollution of rivers and seas. The rise in the water company’s investor payout came as it reported a small increase in profit for the past year and forecast strong earnings growth for the coming year. Severn Trent admitted that it, and the water industry, should have “acted faster” and given more attention to sewage discharge into waterways. The company said it had made improvements to the amount of water lost through leaks, complaints about water quality, persistent low pressure and pollution, but added that external sewer flooding was a “key focus area”. One of Britain’s largest water companies, supplying customers in England and Wales, Severn Trent said it intended to raise its final dividend to 64.09p a share from 61.28p a year earlier. The increase will take the total amount paid out by Severn Trent to its shareholders over the past year to nearly £1.07 a share, up from £1.02 a year earlier. The total payout amounts to £261m, up from £255m in 2022. The move follows the company’s policy of raising dividends annually by at least the rate of inflation. The UK’s water companies will pay an estimated £14.7bn in dividends by the end of this decade, according to analysis for the Guardian, at the same time as making customers pay for new investment to stop the flow of sewage pollution into the country’s waterways. Severn Trent, which has more than 8 million customers, supplies water across a region stretching from the Bristol Channel to the Humber and from mid-Wales to Rutland in the east Midlands. The FTSE 100 company, which has its headquarters in Coventry, reported a 0.5% increase in pre-tax profit to just under £509m for the year to 31 March, as a result of robust consumption by households and businesses. Severn Trent is anticipating strong earnings growth this year thanks to a reduction of up to a fifth in the amount of interest it has to pay, which it believes should speed up further the following year as energy bills and costs linked to inflation come down. Severn Trent’s chief executive, Liv Garfield, who was paid £3.9m in the year 2021-22, said the company was helping up to 50,000 customers with their bills during the cost of living crisis and would be creating up to 1,000 jobs in the region in the next couple of years. “We are expecting the biggest investment period the sector has ever seen, with a focus on water resources, improving environmental standards and on net zero,” Garfield said. The firm has forecast that its capital investment could reach between £850m and £1bn during the current financial year. The company said that “corporate costs”, which include directors’ bonuses, rose by £500,000 to £8.7m last year. However, investors will have to wait until the company publishes its annual report later this year to learn whether Garfield received a bonus. Earlier this month, three water bosses said they would forgo their bonuses amid public anger over the dumping of sewage in Britain’s rivers and water industry payouts.