30th Jan 2014 07:57
LONDON (Alliance News) - United Utilities Group PLC Wednesday said revenue has increased since October 1, 2013, reflecting regulated price changes for 2013/14 as it continued to make good progress on its regulatory capital investment programme.
In an interim management statement, the water firm said its revenue increase is only partly offset by higher depreciation and other operating costs, as it continues to tightly manage its cost base.
United Utilities said it remains on track to invest at least GBP800 million in its asset base in 2013/14, delivering benefits for customers, the environment and the regional economy.
"We intend to undertake transitional investment in 2014/15 to de-risk key projects due to be delivered in the next regulatory period," the utility said.
The firm said in light of this, expenditure for its 2014/15 capital investment programme, including spend relating to private sewers, is expected to be similar to 2013/14.
United Utilities said customer service is continuing to improve, as measured by UK regulator Ofwat's service incentive mechanism, underpinned by good operational and environmental performance.
Financially, the firm said it remains "robust" while its regulatory capital asset base continues to grow reflecting high levels of capital investment and the impact of UK retail price inflation.
However, group net debt is slightly higher compared with the position at September 30, 2013.
"This principally reflects expenditure on the regulatory capital investment programme and payments in relation to interest and taxation, largely offset by operational cash flows and fair value gains on the group's debt and derivative instruments," it added.
Despite this, United Utilities said it had headroom to cover projected financing needs into 2016 following the recent agreement of a GBP50 million loan with the European Investment Bank.
Overall the FTSE100 firm said gearing remains stable and within Ofwat's assumed range - 55% to 65% net debt to regulatory capital value.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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