United Utilities (UU.) saw its underlying operating profit increase by 9 per cent to £744m in the year to 31 March. This reflects a small lift in revenue and lower infrastructure renewals expenditure.
But statutory pre-tax profit was hit by an £83m write-down of bioresources assets that are no longer in use and £56m of costs relating to Covid-19. The business-focused Water Plus joint venture with Severn Trent (SVT) was already struggling before the pandemic, with United Utilities’ share of the underlying loss amounting to £14m. But coronavirus led to an additional £32m of losses. The group also booked a £19m bad debt charge to account for the higher risk of household customers being unable to pay their bills.
It expects a further hit to commercial revenue this year – every 1 per cent drop in non-household consumption will translate to £4m of lost revenue. But the regulatory model means this shortfall can be recovered in future years.
Higher capital expenditure on regulated water and wastewater activities pushed net debt up 4 per cent to £7.4bn. But at 62 per cent of regulatory capital value, this is within the target 55-65 per cent range. The group finished the period with £1.2bn of available liquidity and plans to raise £500m-£800m of term funding over the coming year to help fund debt refinancing and its regulatory capital investment programme.
| UNITED UTILITIES (UU.) | ||||
| ORD PRICE: | 865p | MARKET VALUE: | £5.9bn | |
| TOUCH: | 865-866p | 12-MONTH HIGH: | 1,069p | LOW: 743p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 55 | |
| NET ASSET VALUE: | 434p | NET DEBT: | £7.4bn | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.73 | 354 | 58.3 | 38.45 |
| 2017 | 1.70 | 442 | 63.6 | 38.87 |
| 2018 | 1.74 | 432 | 52.0 | 39.73 |
| 2019 | 1.82 | 436 | 53.3 | 41.28 |
| 2020 | 1.86 | 303 | 15.7 | 42.60 |
| % change | +2 | -30 | -71 | +3 |
| Ex-div: | 25 Jun | |||
| Payment: | 3 Aug | |||
