United Utilities Group PLC (LSE:UU.) pledged to reduce pollution and leakages as it said higher costs and lower revenue hit profitability.
The UK’s largest listed water company reported revenue in the year to 31 March 2023 fell 2% to £1.82bn from £1.86bn the year prior, largely reflecting lower consumption which more than offset the allowed regulatory revenue increase.
Pre-tax profit tumbled to £256.3mln, down 42% from £439.9mln a year earlier, while underlying operating profit of £441mln was down from £610mln, driven by lower revenue and the inflationary impact on operating costs, in particular procurement of electricity and chemicals.
Underlying loss per share (LPS) of 1.3p was down from EPS of 53.8p due to the impact of inflation on debt indexation and the operating result.
Return on regulated equity improved 3% to 11.0%, while the firm boosted the total dividend by 4.6% to 45.51p, including a final payout of 30.34p.
United Utilities pledged to do more on pollution and leakages.
“We are acutely aware that this is a critical time for the water sector, with many challenges facing us, especially around river health.”
“We should all have acted sooner to recognise and address the impact of storm overflows.”
It said in October it will put forward an ambitious plan for the next regulatory period, including its biggest environmental programme yet, targeting a significant improvement in storm overflow performance.
Looking ahead, and the company is targeting dividend growth in line with CPIH inflation reading.