United Utilities has reported relatively buoyant first-half numbers with underlying profits rising 6 per cent to £268m, predominantly due to lower interest charges.
The main supplier of water, electricity and gas to the flood-hit Cumbria region, management report the repair bill will be "in the low millions". Meanwhile, the focus remains on Ofwat's final price determination (due the day after these results).
Ofwat's draft proposals in July imposed hefty price cuts on United, and analysts expect a rights issue and a dividend cut of up to 30 per cent in 2010-11, but United has until late January to respond to Ofwat's final proposals.
"We've got two months to make the most important decision for the next five years," says chief executive Philip Green.
Underlying operating profits from United's regulated business were flat at £348m with a 6 per cent allowed price increase and efficiency savings mitigating higher power costs, rising bad debts and higher property rates.
After the period, stake sales in Northern Gas Networks and Manila Water netted United £130m, and the group plans to "consider further opportunities" to divest.
Broker Deutsche Bank forecasts full-year pre-tax profits of £526m and EPS of 57.9p in 2010, falling to £409m and 45p in 2011.
| UNITED UTILITIES (UU.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 481p | MARKET VALUE: | £3.3bn | |
| TOUCH: | 480-481p | 12-MONTH HIGH: | 662p | LOW: 429p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 207p | NET DEBT: | £4.9bn | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.20 | 306 | 0.60 | 10.64 |
| 2009 | 1.21 | 206 | 29.1 | 11.17 |
| % change | +1 | -33 | +4,750 | +5 |
Ex-div: 16 Dec Payment: 3 Feb | ||||
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