United Utilities' (UU.) plan to use some the money handed back to it by HMRC to reduce customer price rises should go down well with the regulator, Ofwat. The water company plans to use £20m of a tax refund to offset price rises for customers next year, meaning that average bills will rise by no more than inflation. Further cash has been earmarked, says management, for "future sharing with customers", including helping customers that find it hard to pay.
United Utilities said that its business plan for the 2015-2020 regulatory period, due to be submitted to Ofwat next week, would mean its customers will see below inflation average bills over 2010-2020. The company also said that it will maintain its dividend policy of 2 per cent a year growth above inflation to at least 2015.
At the operational level, revenues in the first half were lifted by a 4 per cent price increase - 1 percentage point of which was real, with the rest being inflation related. Reported numbers were boosted by the tax credits - on an underlying basis, operating profit grew 9 per cent to £343m, as total cost increases were kept below 1 per cent.
Analysts at Deutsche are forecasting full-year adjusted pre-tax profit of £376m, giving EPS of 42.95p (2013: £354m/40.8p).
UNITED UTILITIES (UU.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 667p | MARKET VALUE: | £4,545m | |
| TOUCH: | 666p-667p | 12-MONTH HIGH: | 795p | LOW:617p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 308p | NET DEBT: | 261% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 823 | 139 | 23.0 | 11.4 |
| 2013 | 853 | 335 | 80.2 | 12.0 |
| % change | +4 | +141 | +249 | +5 |
Ex-div:18 Dec Payment:03 Feb | ||||
