United Utilities is continuing to accelerate its AMP6 investment programme, according to its latest trading update published this morning.

Current trading is in line with the group’s expectations for the six months ending 30 September 2016 the water company is also continuing to deliver improvements in operational performance and customer service.

In July, United Utilities attained ‘industry leading company’ status, as measured through the Environment Agency’s annual assessment, and earlier this month, also retained its Dow Jones Sustainability Index ‘World Class’ rating for the ninth consecutive year.

The firm said it is also encouraged by Ofwat’s 2016/17 first wave service incentive mechanism (SIM) qualitative score, which shows further improvement in customer satisfaction compared with last year.

The utility delivered a small net reward for 2015/16 on its outcome delivery incentives (ODIs), which it described as representing  “a tough set of performance targets.”

Acceleration of the AMP6 investment programme is continuing this year to deliver early customer service and operational benefits, enhance asset resilience and optimise performance under the ODIs.

The trading statement says United Utilities has seen continued strong performance in the areas of private sewers and pollution incidents and that the modernisation programme at its largest wastewater treatment works, Davyhulme, is also progressing well.

Total regulatory capital investment for 2016/17, including infrastructure renewals expenditure, is expected to be around £800 million, similar to last year.

Group revenue impacted by Water Plus business retail joint venture

Group revenue is expected to be slightly lower than the first half of last year, reflecting the accounting impact of our Water Plus business retail joint venture, which completed on 1 June 2016, partly offset by allowed regulatory revenue changes.

Underlying operating profit for the first half of 2016/17 is expected to be marginally higher than the first half of 2015/16. It is anticipated that infrastructure renewals expenditure (IRE) in the first half of 2016/17 will be slightly lower than the first half of last year. In line with planned capital investment phasing,  the utility expects an increase in IRE in the second half of 2016/17, compared with the first half of the year.

United Utilities said it is also continuing to invest in its ‘systems thinking’ approach, which integrates the use of assets, leverages data intelligence and employs new work processes and technology to support operational performance enhancement. The water company will roll out additional new capability this year, supporting a drive for further improvement.

As the company continues to invest in its asset base, group net debt at 30 September 2016 is expected to be slightly higher than the position at 31 March 2016. This is principally attributed to regulatory capital expenditure, payment of the 2015/16 final dividend and payments in relation to interest and tax, largely offset by operational cash flows.

Gearing “remains comfortably” within the target range of 55% to 65% net debt to regulatory capital value, supporting a solid A3 credit rating for United Utilities Water. The group has financing headroom into 2018.

The water company will announce its half year results on 23 November 2016.