The UK’s largest listed water company has agreed to sell twelve operations since April, including its water and electricity meter business MeterFit, a stake in contracts with Southern Water and three Scottish private finance initiatives, with a total enterprise value of £600m.
United Utilities said it will reinvest the money once most of the sales are completed in the second half of the financial year, and added it will now shift focus to its core business of supplying water and sewage services to around 7m people in the north west of England.
The company said yesterday trading was in line with expectations for the six months to September. However, it expects underlying profit to be lower than last year, mostly due to a 4.3 per cent effective drop in energy bills following a price review by Ofwat.
Chief executive Philip Green said: “We believe that, with the group’s consistent focus on its core activities and the low cost of its debt portfolio, we are well positioned to deliver outperformance over the 2010-15 regulatory period.”
The group said it has financial headroom to cover its liabilities until the summer of 2012, but that ongoing infrastructure work means capital expenditure will remain high this year.
The coalition’s changes to corporation tax will mean a deferred tax credit of £50m in the next financial year, the firm said, with a saving of more than £200m during the five-year life of the Parliament.
Shares in the blue-chip firm closed 0.5 per cent down at 573p yesterday.