United Utilities gets boost from higher pricing

 
City A.M. Reporter
UNITED Utilities yesterday said price rises had enabled it to report higher revenues yesterday, keeping the UK’s largest listed water utility on track to meet its targets.

Revenue increased 3.8 per cent to £823m in the six months to the end of September, thanks to a 5.8 per cent price increase permitted by British water regulator Ofwat.

Ofwat recently set out proposals to give it greater scope to set different price limits, a move that has proved unpopular with many of the water firms.

“We are unable to accept the flexibility that they’ve proposed in the licence modifications, because of the uncertainty that that generates and also the potential for that uncertainty feeding into customer bills,” chief executive Steve Mogford said on a conference call.

The company said it was on track to deliver targets that include £300m of financing outperformance, despite a tough economic environment.

“The North West faces a particularly tough economic environment, with unemployment having increased at a faster rate than any other UK region in 2011-12, resulting in an adverse impact on ability to pay this year,” the company said.

The company reported underlying operating profit down £8m to £316m, broadly in line with estimates. It attributed the drop to increased infrastructure expenditure following last year’s transfer of responsibility for private sewers to wastewater companies.