UU’s sell-off of non-regulated assets continues

UNITED Utilities will tell shareholders at its AGM today that it is “continuing to evaluate the expressions of interest” it has received for the remaining bits of its non-regulated business.

The group, which has sold more than £540m of business interests in its non-regulated portfolio in recent months, said that it intends to retain the proceeds to help it deliver its 2010-2015 programme.

Regulator Ofwat published new price limits for water companies in November last year,which will impose a lower charging structure on firms while requiring higher levels of capital investment.

The new pricing was introduced in April, and United Utilities said that it was introducing “detailed efficiency plans” to help meet its commitments.

“Despite a tough price review, we believe that with the group’s consistent focus on its core activities we are well positioned to meet the challenges of the new five-year regulatory period,” said chairman John McAdam.

The firm is also set to announce a £158m final dividend of 23.13p per share, taking its total dividend for 2009/10 to 34.3p.

“The group has delivered a sound underlying financial performance for the year,
despite a challenging economic climate,” said Mr McAdam.

He added that current trading for the period since its new financial year began on April 1 was “in line with expectations” and reflected the new charging regime, which has led to a 4.3 per cent decrease in prices.

The group has also been impacted by lower rates of water usage, more  bad debts and an increase in its property rates, although it argued that the latter was offset slightly by lower power costs.

The company also said that it would “continue to monitor the situation” regarding the recently-imposed hosepipe ban after a long dry spell. It  said that recent increases in rainfall “together with actions taken by the company” had improved water resource levels.

It also announced that non-executive director Andrew Pinder – a long-serving member of its remuneration committee, is stepping down.

He follows recently announced departures Charlie Cornish, who will leave on September 30 to become chief executive of Manchester Airport Group, and chief finance offer Tim Weller, who left in May to join Cable & Wireless. His  replacement, Russ Houlden, will join from Telecom New Zealand in October.