United profit withstands
UNITED UTILITIES, the water company, said its forecast for underlying operating profits over the six months to the end of September were in line with expectations, despite cost pressures.
United, which supplies around 7m customers across the north west, said revenue growth in its regulated business for the year would be lower than the six per cent price rise the regulator Ofwat allows, because of reduced demand for water.
But chief executive Philip Green said he was expecting a “sound underlying financial performance”.
The group added that bad debt, and an increase in depreciation, were contributing to cost pressures.
In its non-regulated activities the firm said it expects a marginal increase in underlying operating profit.
The group, which has more than 25,000 miles of pipes worldwide, said it expected a net tax inflow of about £50m for the half year after tax returns, “following agreement with UK tax authorities of prior years’ tax returns”.
But United warned it saw one-off costs of £10m for “restructuring within the business” ahead.
Earlier this month, United put forward its response to Ofwat’s proposed levels for price increases between 2010-2015. The final decision will be made in November.
Green had sat on the board of Lloyds banking group until earlier this week, but stood down saying he wanted to focus more on United Utilities.