United Utilities' trading update this week largely confirmed the group's previous guidance on disposals, while also reassuring investors that the half-year results would be in line with expectations. Operating profits, though, are set to be lower as the new pricing regime meant a decrease in prices, while cost pressures have increased.
In line with its strategy, the group has now completed the sale of nearly all its non-regulated businesses for a total enterprise value of approximately £600m - the proceeds are to be reinvested within the company. Capital expenditure is expected to remain high, along with infrastructure renewals, so depreciation will be higher than in 2009's second half. As previously stated, United will pay a 30p dividend for the full year and will target dividend growth of inflation plus 2 per cent until the end of the regulatory period in March 2015.
Price: 553p
When: 26 March 2010
Performance: +3 per cent
