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United Utilities invests £80m to cope with dry summer

By Oliver Haill

Date: Friday 28 Sep 2018

United Utilities invests £80m to cope with dry summer

(Sharecast News) - United Utilities said it had increased revenue in the first half of the year but statutory profits will take a hit from extra investment to cope with the long, hot summer.

The water company said over the full year it expected to pour £80m into measures to "safeguard continuity of supplies to customers and protect our water resources" and avoid water restrictions, with £40m of operating costs and infrastructure renewals expenditure and £40m of capital expenditure.

Directors said that the operating costs associated with the dry weather will be accounted for as an adjusted item and therefore underlying operating profit for the first half of the year is expected to be up, despite underlying infrastructure renewals expenditure being higher.

Current trading was reported as in line with directors' expectations for the six months to 30 September, with first-half revenue higher thanks to changes allowed by regulator Ofwat.

Underlying net finance costs for the first half will be around £30m lower, reflecting the impact of lower RPI inflation on debt, but investment in assets will lead to a "small increase" in group net debt since 31 March.

The FTSE 100 company said it should be eligible for a Service Incentive Mechanism reward after customer satisfaction continued to rise, with the most recent UK Customer Service Index placing it top among all water and wastewater companies following a strong performance against Ofwat's Service Incentive Mechanism measure.


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