UU trades in line and expects £50m tax boost
UNITED Utilities, the only FTSE 100 company headquartered in the North West, says it is trading in line with expectations and expects to be £50m better off thanks to tax changes.
In a trading update ahead of its annual meeting in Manchester today the Warrington group said revenue since April 1 was ahead, reflecting the impact of 4.5% price increases agreed by regulator OFWAT.
UU said this increase had been offset by higher depreciation and infrastructure expenditure “alongside other inflationary cost pressures”
UU said group net debt was slightly highter now than at the year end (March 31) as a result of continued high levels of investment in improving the region’s water infrastructure – over the next five years the company plans to spend £3.5bn – £700m a year.
The 1% cut in corporation tax, from 26% to 25%, effective from April 1 2012 is expected to lead to a deferred tax credit of £50m, the company revealed. This will be recognised in the figures for the first half of the 2011/12 period.
“The group expects to deliver a sound underlying financial performance for 2011/12, despite ongoing cost pressures.
“United Utilities has a clear focus on improving operational performance and outperforming its regulatory contract, and the company’s efficiency initiatives are progressing well.
“The board intends to continue with its dividend policy of targeting an annual growth rate of 2% above RPI inflation through to at least 2015,” the company said.
