United Utilities says that it is expecting group revenue to be just under 3% higher in the first half of 2017 compared to the same period last year, according to its latest trading update for the six months ending 30 September 2017.
The utility said that acceleration of investment in its assets during AMP6 had helped secure the benefit of operational efficiencies early and deliver the cost savings underpinning its business plan.
Total regulatory capital investment for 2017/18, including infrastructure renewals expenditure (IRE), is expected to be around £800 million. The investment includes the first £20 million of the additional investment in resilience for the benefit of customers announced in the group’s full year results.
United Utiliies is continuing to roll out further capability through its Systems Thinking approach which enables it to manage its entire network as a system via am integrated control centre, delivering operational improvements and cost savings across the regulatory period.
The water company said it had successfully implemented a number of industry leading innovations in its customer service offering and is on track to implement further initiatives this year, harnessing the opportunity for co-design with customers where appropriate.
Group revenue is expected to be just under 3% higher than the first half of last year, reflecting regulatory revenue changes allowed by Ofwat. This has been partly offset by the accounting impact of its Water Plus business retail joint venture with Severn Trent Water which completed on 1 June 2016.
Underlying operating profit for the first half of 2017/18 is expected to be higher than the first half of 2016/17. It is anticipated that IRE in the first half of 2017/18 will be slightly lower than the first half of last year. In line with planned capital investment phasing, the group is expecting an increase in IRE in the second half of 2017/18, compared with the first half of the year.
Underlying net finance expense for the first half of 2017/18 is expected to be around £30 million higher than the first half of last year, with a small increase in group net debt at 30 September 2017 compared with the position at 31 March 2017.
In July, United Utilities’ credit ratings were upgraded by Standard & Poor’s, with United Utilities Water being raised one notch to A- from BBB+.
In July United Utilities was one of only two companies to retain the ‘Industry Leading Company’ status as measured through the Environment Agency’s annual assessment and, earlier this month, it retained its Dow Jones Sustainability Index ‘World Class’ rating for the tenth consecutive year
United Utilities will announce its 2017/18 half year results on 22 November 2017.
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