25th Mar 2015 07:15
LONDON (Alliance News) - United Utilities PLC Wednesday said trading in the current financial year is in line with expectations and said revenue and operating profit will be "slightly higher" than last year.
The FTSE 100 water and sewage service provider said revenue is expected to increase in the year, which ends on March 31, due to the regulated price allowance for 2014 to 2015, partly offset by the impact of a previously announced one-off special customer discount of around GBP20 million.
Operating profit is also expected to rise and United Utilities said it is tightly managing its cost base "despite the increase in depreciation and other cost pressures, including bad debts", United Utilities said in a statement.
However, the company's net debt is also set to rise due to regulatory capital expenditure, interim dividend payments, and payments related to interest and tax, alongside fair value losses on the group's debt and derivative instruments, largely offset by operational cash flows. Gearing remains "well within" the target range of 55% to 65%.
Regulatory capital expenditure is set to be in excess of GBP850 million for the current financial year, which will include infrastructure renewals.
"Our capital delivery performance in this regulatory period has been very good, as we invest to maintain and improve services for customers and deliver further environmental benefits...This substantial capital programme also makes a significant contribution to the regional economy, providing new investment and supporting employment," said United Utilities.
"Current trading is in line with the group's expectations for the year ending March 31, 2015. Over the last four years, United Utilities has delivered significant operational performance and customer service improvements and has exceeded its 2010 to 2015 regulatory outperformance targets," it said.
By Joshua Warner; [email protected]; @JoshAlliance
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