United Utilities hikes dividend and pours money into its customer services

Helen Cahill
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Ofwat has said there isn't enough competition in the water market (Source: Getty)

United Utilities hiked its interim dividend this morning as it announced a rise in operating profit - and has said it is becoming more committed to delivering top-quality customer services.

The figures

For the six months ending 30 September 2016, revenues dipped to £853m, down from £857m during the same period last year.

Read more: United Utilities rises as trading remains in line with expectations

Underlying profit rose from £308.6m to £312.5m, and operating profit increased by 10.2 per cent to £303.6m.

The company increased its interim dividend by 1.1 per cent to 12.95p per share.

Why it's interesting

United utilities today embraced Ofwat, boasting that the regulator has been approving of the company's customer service improvements, but this time last year it was blaming the regulator's price controls for its falling revenues and profits.

Read more: Regulator calls for more competition in the water market

Ofwat has been railing against the poor customer service in the water industry, saying that customers are "being left behind" due to a lack of competition in the sector. The regulator has said that people should be able to pick their own providers and that "water companies provide an analogue service in a digital world".

United Utilities has heeded Ofwat's warnings. The company said that it has been bringing forward investments to deliver a high-level of customer service, having invested £383m in the first half of the year, with a view to spending £800m in the full year.

What United Utilities said

Chief executive Steve Mogford said: "This has been a strong first half performance in which we made significant progress towards meeting our customer, environmental and financial targets.

"Customer service has again improved, resulting in our best score under Ofwat's revised service incentive mechanism. We're continuing to enhance our customer service offering and recently launched Priority Services, to provide dedicated support for those who are experiencing short or long-term personal or financial challenges."

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