United Utilities, the UK's largest water company, saw first-half underlying operating profit rise £29m to £343.2m, from £314.7m last year. The company said it will use a £75m tax rebate to provide a £20m customer discount, offsetting the allowed real price increase for 2014/15. Revenue increased to £853.3m, from £822.9m a year ago. This, said the firm, was "principally as a result of the impact of the regulated price increase for 2013/14 of 4.0 per cent".
Chief executive Steve Mogford said that the company is discounting prices next year "so that customers do not pay the full allowed price increase, meaning that, on average, bills will go up by no more than inflation."
He also stressed the United Utilities is committed "to further support for customers struggling to pay." In addition to the £20m discount, the company will use £17m of the £75m on helping customers, and a further £35m for "future sharing with customers". It had already announced the reinvestment of £240m of outperformance to benefit its customers and the environment.
Profit before tax rose £27m to £216m in the period - slightly below underlying profit, owing to the increase in net finance, which was pushed up by higher levels of index-linked debt.
United Utilities expects to invest at least £800m over 2013/14, and says it has seen over 90 per cent delivery of its capital investment programme over the period. In line with policy, it is to deliver an interim dividend of 12.01 pence per share, a six per cent increase from last year.
The company put its improvement down to higher levels of customer satisfaction, effective investment delivery and a strong performance in Ofwat's so-called key performance indicators. It remains confident that it will hit its regulatory targets, addng that it is pleased with its progress but believes it can "improve further".
Yesterday, fellow water company Severn Trent saw half-year profits fall 5.8 per cent, but raised its dividend and re-stressed its pledge to keep rises in household bills below inflation.
United Utilities shares have climbed over 1.5 per cent in trading this morning:
A statement from KPMG, included in this morning's report, confirms that a review of the United Utilities' half-yearly financial results has found them to be in accordance with EU and UK regulations.