UU trading in line as Ofwat dialogue goes on

WATER company United Utilities says it is trading in line with City expectation and its half year profits will be at a “similar level” to the £323.3m it made in the first half of 2013.

The Warrington-based group said it was continuing to work with regulator OFWAT to find an agreement on the terms of a new five-year deal to supply homes and business in the region.

UU said: “Current trading is in line with the group’s expectations for the six months ending 30 September 2014. Customer service continues to improve, underpinned by good operational and environmental performance. The company remains confident of delivering its 2010-15 regulatory outperformance targets.”

It said its half year operating profit reflect an allowed regulated price rise offset by the impact of its previously-announced special customer discount and the expected increase in depreciation and other cost pressures, including bad debt.

On the question of the price review proces for the 2015-2020 period, UU
said it is in “detailed dialogue” with Ofwat. The sticking point is on “the wholesale total expenditure differences between UUW’s business plan and Ofwat’s draft determinations.”

United Utilities will announce its half year results on November 26.