United Utilities feels the pressure in the recession

UNITED UTILITIES, the biggest water company in the UK, yesterday said its profit had risen by one per cent to &pound;370m, but that it had been hit by tumbling demand from businesses and homes in the downturn. <br /><br />Turnover rose 0.5 per cent to &pound;1.2bn in the six months to 30 September, and the group proposed an interim dividend up five per cent to 11.17p per share.<br /><br />Rivals Severn Trent and Northumbrian said earlier this week they had been hit by the downturn too, as companies scrimp on water usage.<br /><br />The report comes ahead of water regulator Ofwat&rsquo;s announcement today on how much companies can charge their customers over the next five years. <br /><br />The announcement could kick off a spate of mergers and acquisitions in the industry, Ernst &amp; Young said, as companies seek to meet efficiency targets. <br /><br />&ldquo;UU&rsquo;s statement hints that the group is unlikely to respond to Ofwat&rsquo;s proposals until January, which means dividend policy won&rsquo;t be announced before next year either,&rdquo; Thuy Quynh Dang at Barclays Wealth said yesterday.