29th Jan 2020 08:35
(Alliance News) - United Utilities Group PLC said Wednesday its main subsidiary, United Utilities Water Ltd, has accepted the final determination covering the period from 2020 to 2025 from water regulator Ofwat.
In addition, the FTSE 100 utility expects to declare a dividend of 42.60 pence for its year ending March 31, a 3.2% increase from the year before.
Reflecting its assessment of the final determination from Ofwat, United Utilities will target growing its dividend each year by CPIH inflation, which is the consumer price index as well as owner-occupiers' housing costs.
This will be a change from its current dividend growth, which is calculated by RPI inflation.
Ofwat's final determination for United Utilities is expected to cut average bills by 14% for the period compared to the group's proposed 11% reduction.
In addition, the determination will allow for a wholesale total expenditure of GBP5.49 billion, and GBP837 million to invest in improvements to service, resilience and effect on the environment.
Finally, Ofwat has set the allowed revenue at GBP8.25 billion, down from United Utilities's view on allowed revenue of GBP8.30 billion.
"We were pleased last year to have been awarded fast-track status reflecting the high quality of our business plan. Our plan provides further service improvements for customers, lower bills, continuing high levels of investment to future proof the region's water infrastructure and maintains our responsible approach to financing," said United Utilities Chief Executive Steve Mogford.
"We have a long track record of sharing outperformance with customers as well as the widest range of payment solutions and affordability schemes in the sector. The final determination delivers the third successive five year period in which customer bills have reduced in real terms," Mogford added.
Shares in United Utilities - which is based in Warrington - were up 0.5% at 1,005.00 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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