United Utilities sees profits rise in year of progress

UNITED Utilities hailed “pleasing results” on all fronts as it reported an 8% increase in profits and continued progress in improving customer service and operational performance.

The Warrington-based company, the only FTSE 100 member located in the North West, said it had helped to save around 400 jobs at collapsed contractor Daniel by arranging for the positions to be transferred to another of its partners, Enterprise.

Chief executive Steve Mogford said: “The situation with Daniel was unfortunate and we wanted to do something to help both those employees affected and also to make sure our customers weren’t impacted.

We worked with Daniel, with the administrator and Enterprise to find a solution and I am pleased we have been able to secure those jobs in the region”

Turning to the results,which saw underlying profits rose from £327m to £354.3m on revenue up 4.5% to £1,63bn (2012: £1.56bn), Mr Mogford said good progress had been made, but there is “no room for complacency”.

Having risen from 21st to 16th in regulator Ofwat’s customer service incentive mechanism, United ended the 2012/13 year in 14th place. Further progress is being made and in the first quarter of 2013 the company has moved into the top 10.

“Three years ago we were in last place, 21st, in the customer service performance league tables and we have worked hard to improve this, while also improving operational efficiences. We have done this and our ambition now is to be in the upper quartile,” Mr Mogford said.  

UU is in the midst of a £3.5bn investment programme during the current regulatory period. Last year it spent £787m and in the next 12 months it will invest £800m. Major projects include a £200m expansion to a water treatment works in Liverpool and a £100m scheme in Preston to build a 3.5km storm-water tunnel.

Mr Mogford, added: “We are improving the quality and reliability of our infrastructure and, across the 2010-15 period, expect to reinvest around £200 million of capital expenditure outperformance for the benefit of our customers and the environment.”

UU announced a final dividend of 22.88p per share, taking the total for the year to 34.32p.