United Utilities Group PLC (LSE:UU.) said current trading is in line with the group's expectations for the full year to end-March 2022, boosted by higher consumption from business customers as activity returns to pre-pandemic levels.
The water and wasterwater company forecast a net increase in revenue of about 3% for the full year, but said the underlying operating profit will remain broadly the same from a year earlier as inflation puts pressure on its core costs.
“Our AMP7 [current asset management plan] guidance on regulatory performance remains unchanged from that given at our half-year results in November 2021,” the company said in a trading update ahead of the release of its full-year results on 26 May 2022.
It added that it still sees inflation having an impact on its financial expense and debt position as at 31 March 2022 from a year earlier.
Earlier this month, United Utilities launched its Better Rivers: Better North West plan to improve river health and recreation over the next three years in response to public anger over sewage being pumped into the UK’s river and waterways.
Last September, the government allowed water companies to dump unprocessed sewage into rivers and the sea, as Brexit and the pandemic disrupted normal water treatment.
“It is our duty to protect the environment we rely on, which includes the health of our rivers and coastlines. We are determined to play our part in tackling the problem of river pollution, which is why we are on track with the investment of almost £900mln in AMP7 to improve the quality of our region's rivers and seas,” the company said, adding that it is working to secure the necessary investment.
Commenting on the increased cost of living in many households, the company said typical household bills have seen a 6% real reduction since the start of AMP7 and it is supporting more than 200,000 customers through extensive affordability schemes as it continues to be mindful of its responsibility to support customers.
Turning to executive remuneration, United Utilities said it will be seeking shareholder support at its July 2022 meeting for the introduction of a new climate change measure in its long-term incentive plan that aligns with its previously announced carbon pledges.
“We have a strong track record of ensuring executive remuneration is directly linked to ESG performance. We intend to further align our executive remuneration policy with our ambitions to operate in an environmentally and socially conscious manner,” it added.
Shares in United Utilities were little changed at 1,071.50p.