United Utilities reports trading in line with expectations in first half

 
Caitlin Morrison
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The water company has been investing heavily (Source: United Utilities)

United Utilities (UU) is expecting revenue and profit to increase in the first half of this year, compared with the same period last year.

Revenue is anticipated to be almost three per cent higher, which the group said was due to "allowed regulatory revenue changes, partly offset by the accounting impact of our Water Plus business retail joint venture".

Meanwhile, underlying operating profit for the first half of 2017/18 is expected to be higher than the first half of 2016/17.

UU said the growth in retail price index (RPI) inflation had increased the company's regulatory capital value, and since the group is "well hedged for inflation, there is also an impact of higher RPI inflation on our index-linked debt and we expect the underlying net finance expense for the first half of 2017/18 to be around £30m higher than the first half of last year".

The firm said it expects a "small increase" in group net debt during the first half due to continued investment in its asset base - UU expects total capital investment for the period to be around £800m.

"The acceleration of investment in our assets across this regulatory period has helped secure the benefit of operational efficiencies early and deliver the cost savings underpinning our business plan," the company said.

"This continued high level of investment will help deliver further improvements in operational performance and customer satisfaction and includes the first £20m of the additional investment in resilience for the benefit of customers as announced in our full year results."

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