15th May 2025 09:41
(Alliance News) - United Utilities Group PLC on Thursday said higher prices, allowed by regulators, helped drive improved profitability and sales in its recent financial year.
The Warrington, England-based water utility said pretax profit more than doubled to GBP355.0 million in the year to March 31 from GBP170.0 million in financial 2024. On an underlying basis, pretax profit rose 54% to GBP338.6 million from GBP220.5 million.
Underlying operating profit rose 22% to GBP633.8 million from GBP517.8 million.
Revenue increased by 10% to GBP2.15 billion from GBP1.95 billion, while operating expenses rose by 5.8% to GBP857.7 million from GBP810.7 million.
Revenue growth reflected regulatory adjustments, United Utilities said, including the 4.2% CPIH-linked rate increase allowed as part of the revenue cap. The revenue increase was partly offset by higher costs as a result of growth in the underlying asset base and inflationary pressures.
CPIH, or the consumer prices index including owner occupiers' housing costs, is a UK measure of inflation.
Chief Executive Louise Beardmore called it a "another strong set of results".
"Our focus on performance has seen us meet or surpass around 80% of our performance targets over the last five years, the best performance of any water company," she stated.
Shares in United Utilities were down 0.8% at 1,062.50 pence each in London on Thursday.
Earnings per share more than doubled to 38.8 pence from 18.6p a year ago. EPS rose by 49% on an underlying basis to 49.6p from 33.3p.
Higher revenue underpinned an improvement in net cash generated from operating activities which rose to GBP918 million from GBP745 million last year.
An annual dividend of 51.85p was declared, up 4.2% from 49.78p last year. This included a final payout of 34.57p compared with 33.19p a year ago.
Looking ahead, United Utilities said it is targeting dividend growth in line with CPIH.
In January, the firm accepted the final determination set out by the regulator, Ofwat, concluding the price review process for the 2025-30 period, known as AMP8.
"This gives us certainty over our performance targets and allowed investment levels for the next five years," the company said.
United Utilities said it is targeting to outperform the regulatory contract by at least 100 basis points while maintaining gearing within a target range of 55% to 65%.
The company made GBP1.08 billion in capital investment in financial 2025, up 47% from financial 2024. It plans a total of GBP9 billion in investment over the AMP8 period.
By Jeremy Cutler, Alliance News reporter
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