United Utilities beats expectations despite profit fall
HALF-year revenues and profits slipped at United Utilities but management said its performance still beat expectations.
In the six months to September 30 revenue dipped 3% to £762.4 while pre-tax profits fell 36% to £122m. The company intends to pay a dividend of 30p for the year, which includes an interim payment of 10p.
Warrington-based United Utilities, which provides water and sewerage services across the North West, said the figures reflected last year’s price review by the regulator OFWAT which said the company must cut bills by 2.6% by 2015.
Lower profits were also down to higher finance charges, which increased by 23% to £191m, one-off restructuring costs of £16m and depreciation charges of £55m. Without these costs the company’s underlying profit figure was £196m, down 24%.
During the period the company also invested £307m in capital projects and said it was close to completing the West East Link, a pipe linking Greater Manchester’s water supply to Merseyside. It also concluded a major sell-off of non-regulated interests which involved around 14 disposals and raised £600m.
Chief executive Philip Green, said: “We have made a good start to the new regulatory period and I am pleased to report results slightly ahead of our expectations.”
He added: “With the programme of actions we are implementing, we are confident of delivering outperformance over the 2010-15 period with financing outperformance already secured. We have continued to make high levels of investment in our water and wastewater assets, with capital expenditure of over £300m in the half year, providing further benefits for customers, shareholders and the environment.”
Earlier in the week the company announced the departure of Mr Green who will leave the business at the end of March. He will be replaced by Steve Mogford, currently with Italian defence group Finmeccanica.
