UNITED Utilities Group, Britain’s largest listed water utility, said it had traded in line with its expectations with higher first-half revenue offset by rising operating expenses.
The British utility said it was on track to meet targets and would accelerate £100m of previously agreed pension deficit payments to provide a higher investment return.
United Utilities’ first-half revenue improved year-on-year due to rising inflation pushing up regulated price increases.
However the costs of renewing infrastructure will continue to rise, with expenditure on regulatory capital investment and depreciation in the second half expected to top that of the first half.
The firm said its underlying net finance costs are expected to be slightly higher than the first half of the year, after it drew down a £200m loan facility. A deferred tax credit of £50m will be recognised this year, the firm said, after corporation tax was lowered from April 2012.
United Utilities reported a lower-than-expected 32 per cent drop in annual profits earlier this year, after it was ordered by regulators to cut prices as part of a sector review.
Meanwhile British Peer Northumbrian Water Group was snapped up by Hong Kong tycoon Li Ka-shing last month for £2.4bn in the biggest takeover this year of a British-listed company, prompting speculation of further takeovers in the sector.
Shares in United Utilities closed down 1.4 per cent at 601.5p.
FAST FACTS | UNITED UTILITIES
● United Utilities provides water and wastewater services to 3.2m households and 400,000 businesses in north west England
● The group maintains 42,000km of pipelines and 100 water treatment works
City A.M. Reporter