Price review squeezes United Utilities’ profits
UNITED Utilities has blamed higher costs and a 2009 price review by the water regulator OFWAT for a sharp fall in profits.
The Warrington-based water and sewerage group saw pre-tax profits drop 20% to £327.1m in the year to March 31. Revenue fell by 4%, or £60m, to £1.51bn. Underlying pre-tax profits, which the group said were more representative of its performance, fell 32% to £329.2m
It said the profit fall was due to the OFWAT review which imposed a 2.6% cut in bills by 2015, along with increases in depreciation, infrastructure renewals expenditure and property rates.
During the year the company concluded its £579m asset sell-off designed to mitigate the impact of price cuts.
The programme saw the group dispose of 14 non-regulated parts of the business but it held on to a 35% stake in Estonian water company Tallinna Vesi.
New chief executive Steve Mogford, pictured, said: “We have made good progress in the early part of the new regulatory period and have continued to drive further performance improvements.
“Despite a year of extreme weather conditions, we have demonstrated resilience, continued to serve our customers and, thanks to the extraordinary efforts of our employees, met our leakage target.
“We have continued to make high levels of investment in our water and wastewater assets, providing further benefits for customers, shareholders and the environment.
“Capital spend in the year was over £600m, as we aim for a smoother investment profile to support efficient delivery and reduce risk.”
The final dividend is 20p a share, taking the total for the year to 30p.
