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United Utilities ebbs lower as full-year profits fall

Full-year revenues rose thanks to Ofwat’s pricing changes, but profits dipped due to a £40mln increase in net finance costs
water treatment facility
United Utilities provides water and sewage treatment services in the north west of England

Shares United Utilities Group PLC (LON:UU.) flowed lower on Thursday morning after the UK’s largest listed water company reported a fall in full-year profits.

Revenues in the year to March 31 climbed just shy of 2% to £1.74bn (2017: £1.70bn), reflecting Ofwat’s regulatory changes and in line with what analysts had been expecting.

But a £40mln increase in net finance costs meant underlying pre-tax profits dipped to £370mln (2017: £389mln).

United Utilities raised its dividend to 26.49p, taking the total pay-out to 39.73p over the year – 2.2% higher than last year.

“The significant progress we have made positions us well as we look towards the next regulatory period and gives us confidence that we can rise to the longer-term challenges resulting from a growing population, affordability concerns and the impact of more volatile weather,” said chief executive Steve Mogford.

The company’s smaller rival, Severn Trent PLC (LON:SVT), posted a 4% rise in full-year profits on Wednesday.

United shares fell 3.3% to 776.6p in early deals.

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