Profits up at Unitied Utilities as investment continues

UNITED Utilities, the North West’s water services provider, grew profits by 2.6% to £189.7m, in the six months to the end of September.

In what the Warrington-based group described as a “good set of results”, revenues in the period were nearly 4% ahead at £822.9m.

Although underlying operating profits were down £8m to £316m as a result of higher infrastructure renewals expenditure of £2354m in the half year, the pre-tax figure was boosted as the FTSE100 group benefited from lower finance charges.

UU said it would be investing £750m in the region’s infrastructure in 2012-13. Alongside this investment the company said it had improved its operational performance by meeting Ofwat’s leakage targets for a seventh year and  rising up a league table for customer service from bottom (21st place) to 16th last year and now 13th of all the water companies.

Chief executive Steve Mogford, said: “We are pleased with the results, which we have achieved against an economic environment in the North West which is still tough.

“We have continued to deliver a better service to our customers and invest substantially in our network. Our sustained focus on operational performance across a broad front has seen us make a further improvement on Ofwat’s service incentive mechanism.”

“We are continuing to invest in our network for the benefit of our customers, the environment and the local economy. Since the start of the regulatory period in 2010, we have invested over £1.6bn as we have sought to deliver a smoother and more effective investment profile.”

Commenting on the recent difference of opinion with Ofwat over its proposed changes to the way licences operate, he said: “United Utilities is committed to continued positive engagement to support the progressive evolution of regulation in the water industry and we have submitted proposals to Ofwat in respect of its recent licence modifications consultation.

“We support the progression of retail competition for business customers and have already assembled a strong team. We have won our first customer out of our region and intend to pursue further opportunities as the market evolves.”