United Utilities buoyant on half-year performance

WATER group United Utilities saw underlying operating profits increase by 3% to £221.2m in the half-year to September.

The Warrington-based group, which provides water and sewerage services across the North West, achieved revenues of £859m, up 1.6%.

After taking into account one-charges and adjustments, profits fell by more than £100m from £333.6m. But this figure was largely down to an accounting gain on debt and derivative instruments last time.

The group’s pension deficit reduced from £177m to £115m, mainly due to a fall in inflation expectations.

Last month UU said household bills will come down in 2015-20 following negotiations with the regulator Ofwat. It expects its revised plan to result in average household bills falling by 4.1% in real terms over the period.

Chief executive Steve Mogford said: “We are approaching the end of the 2010-15 regulatory period and we are pleased with the progress we have made over the last few years. We are now a leading operational performer in our sector, having delivered or exceeded our outperformance targets, and are one of the most improved water companies for customer satisfaction.

“This strong performance has given us the capacity to reinvest around £280m, for the benefit of all our stakeholders. In addition, our customers are set to benefit from below inflation growth in average household bills for the decade to 2020.

“The next regulatory period will place more emphasis on operational performance. Our significant improvements and the foundations we have built provide a solid platform for the future.”

The board has declared an interim dividend of 12.56p, up 4% on the first-half pay out.