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United Utilities expects full year revenues and profits to rise

Revenue is expected to be “slightly higher” than last year while underlying operating profit is forecast to be “moderately” higher”

water
The company is on track to submit a business plan for Ofwat’s price review this year

British water utility United Utilities Group PLC (LON:UU.) expects profits and revenues to rise in the year ending March, supported by higher charges allowed by the regulator.

The company said revenue is projected to be “slightly higher” than last year while underlying operating profit is forecast to be “moderately” higher”.  

READ: United Utilities downgraded amid worries over the inflationary impact on its earnings line

Regulatory changes in how utilities charge customers lifted revenue, offsetting the accounting impact of its Water Plus business retail joint venture with Severn Trent completed in June 2016.

Higher retail price inflation (RPI) this year is expected to increase the company’s regulatory capital value by around £400mln.

However, the group anticipates the underlying net finance expense to be £40mln higher than last year due to the impact of higher RPI on its index-linked debt.

United Utilities predicts a “small increase” in group net debt at March 31 compared to September 30.

The company added that it is on track to submit a business plan for Ofwat’s PR19 price review in September and is “confident” that it will deliver against the regulator’s four key themes of “great customer service, affordable bills, innovation and resilience”. 

Quick facts: United Utilities Group PLC

Price: 858.6 GBX

LSE:UU.
Market: LSE
Market Cap: £5.85 billion
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