25th Nov 2015 07:11
LONDON (Alliance News) - United Utilities Group PLC on Wednesday said its operating profit was hit by higher costs and a water quality incident in the first half, with revenue broadly flat and its interim dividend pushed up slightly.
The FTSE 100-listed water utility said its operating profit for the financial half year to the end of September was down to GBP278.3 million from GBP340.5 million a year earlier, as expected, as the group was hit by higher regulated price controls, more depreciation costs, and the water quality incident which occurred in August.
United Utilities had said in September that its first half operating profit would take a GBP30.0 million hit from compensation payments after a bug was found in its water supply to customers in Lancashire in August. Routine tests conducted at the Franklaw water treatment works in Preston detected small traces of cryptosporidium - a microscopic bug - in the water, which meant its customers in the area were forced to boil water before consumption.
United Utilities had said it would book a one-off cost totalling GBP25.0 million in the first half to account for the compensation it is in the process of paying customers, alongside a further GBP5.0 million one-off restructuring cost. Those compensation costs have now been paid.
Revenue for the first half was broadly flat at GBP857.0 million, against GBP859.4 million, mainly due to the previous year being impacted by a special discount the company put on its customer bills, which offset in the comparison a hit taken this year from new regulated price controls.
The company said it will pay an interim dividend of 12.81 pence per share, up from 12.56p.
"Our progress over the first six months of this new regulatory period underpins our confidence that our targets remain tough but within reach. We are well placed to deliver further value for customers, shareholders and the environment underpinned by a robust capital structure and good credit ratings," said Chief Executive Steve Mogford.
By Sam Unsted; [email protected]; @SamUAtAlliance
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