26th May 2016 11:41
LONDON (Alliance News) - United Utilities Group PLC on Thursday said profit fell in line with its expectations in its recent financial year, but revenue grew and the water group said it is well positioned for the current regulatory period.
The FTSE 100 utility said its operating profit for the year to the end of March was GBP567.9 million, down 13% from GBP653.3 million. United Utilities will pay a total dividend for the year of 38.45 pence, compared to 37.70p a year earlier.
Underlying operating profit was GBP604.1 million, down 9.1% from GBP664.3 million and in line with the company's expectations amid new regulated price controls imposed on the water industry.
Underlying profit was also pushed lower by an increase in infrastructure renewal spend, as the company accelerated investment plans in order to deliver early operational benefits for the business. Increases in depreciation and other costs also pushed down underlying profit, though some of this was offset by lower bad debts, power and regulatory fees.
Revenue rose 0.6% to GBP1.73 billion from GBP1.72 billion the year before, increasing in spite of the new price controls, due to higher-than-anticipated volumes, plus a rise in non-regulated sales. The prior year, revenue had also taken a one-off hit from the GBP21.0 million special discount United Utilities had applied to customer bills.
The group said it accelerated its investment plans over the course of the year in order to deliver early operational benefits in the new regulatory period. Overall, total regulatory capital investment for the financial year was GBP799.0 million.
United Utilities said that, in addition to its GBP3.5 billion five-year regulatory capital spending programme through to 2020, it will spend another GBP100.0 million on non-regulated projects, focusing on solar power.
The group also identified and is implementing a range of further efficiency initiatives in order to meet its total spending allowance under the regulatory regime.
"We accelerated our investment programme to deliver early operational benefit and exceeded our expectations by achieving a small reward across our outcome delivery incentives, against a tough set of targets," said Chief Executive Steve Mogford.
"Our progress over this first year of the new regulatory period shows we are well placed to deliver further value for customers, shareholders and the environment, underpinned by a robust capital structure and good credit ratings," Mogford added.
Shares in the group were down 1.0% to 955.50p Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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