United Utilities has reported a strong financial performance with the publication of its full year results for the year ended 31 March 2019 this morning.

The company said:

“This has been another year in which we have gone from strength to strength, achieving leading and sustainable results across many areas of operational performance.”

Key financial highlights during the year include:

• Underlying operating profit of £684.8 million (£645.1 million 2017/18)
• Revenue £1,818.5 million (£1,735.8 million 2017/18)
• Net wholesale ODI reward of £19 million for the year, expected cumulative AMP6 reward of around £30 million
• IFRS pension surplus of £484m at 31 March 2019, pension funding deficit eliminated in April 2019
• Total dividend per ordinary share (pence) 41.28p (39.73p 2017/18)
• Net regulatory capital spend £821.0 million ( £816.1million 2017/18)

The utility has achieved its best ever customer satisfaction SIM scores in 2018/19, continuing to improve at a faster rate than the industry average in AMP6, positioning it as one of the leading water and wastewater companies. United Utilities is anticipating a reward of around £16 million for AMP6.

Over the course of AMP6 the firm has developed new services that increase the speed and quality of its customer service, including a new system that enables it to proactively keep customers informed of events on the network, increasing the hours it is available for customers contact and increasing its range of contact channels so they do not always need to call.

“We have driven an increase in digital engagement through a new customer centric website, the introduction of an easy to use mobile app and a substantially enhanced social media presence on commonly used platforms such as Facebook and Twitter,” the company said.

The water company remains confident of delivering £100 million of totex outperformance against its AMP6 Final Determination scope and expects to deliver a net reward in the region of £30 million against our wholesale Outcome Delivery Incentives (ODIs) for AMP6.

United Utilities’ main areas of reward to date have come through performance in the areas of private sewers, pollution and leakage - the firm has met its leakage target for 13 consecutive years. Main penalty area has been on reliable water service and water quality service.

The company is investing a further £100 million of outperformance in AMP6 in areas where it has the opportunity to deliver improved performance earlier in AMP7. This takes total outperformance sharing to £350 million for AMP6 and over £600 million across AMPs 5 and 6.

The firm was awarded the highest grades for the sector in Ofwat's initial assessment of company business plans, achieving fast-track status for the next regulatory period and securing greater clarity with a year to go before the start of AMP7.

Across the 2015-20 regulatory period, United Utilities has been working with a single engineering partner and four design and construction partners to deliver a regulatory capital investment programme of around £3.9 billion. The firm said it was involving partners much earlier in project definition and packaging projects by type, geography and timing in order to deliver efficiencies. Projects are allocated on an incentive or competitive basis - leading to partners presenting a range of solutions, innovations and pricing.

On its asset optimisation programme, United Utilities said this is continuing to provide the benefits of increased and more effective use of operational site management to optimise power and chemical use and the development of more combined heat and power assets to generate renewable energy.

In addition to the electricity it generates from bioresources, the utility is developing other renewable energy facilities. This is primarily in the area of solar, where it has invested £59 million in the first four years of the 2015-20 regulatory period.

Steve Mogford, Chief Executive Officer, said:

"Always operating in the best interests of customers is at the very heart of our operations and this is reflected in our best ever customer satisfaction scores. We have taken the lead in transforming how the sector supports customers, particularly those in vulnerable circumstances, and have delivered more for customers whilst reducing bills by 10 per cent in real terms since 2010.

"We are achieving leading and sustainable results across many areas of operational performance, benefiting from the investment that we accelerated into the early years of the current regulatory period and from our deeply embedded innovation culture that is considered to be the best in the sector. Our Systems Thinking approach has underpinned a strong performance on our outcome delivery incentives against a backdrop of increasingly challenging targets and maintaining resilient services to customers during the extreme periods of weather in 2018.

"Ofwat's fast-track assessment of our 2020-2025 business plan - that achieved the highest grades for the sector - reflects the quality of our future plans and the performance improvements we have already delivered. We are increasing our additional investment by another £100 million, to total £350 million, to accelerate the delivery of further performance improvements and facilitate a flying start to the next regulatory period. We are well placed for the remainder of the current regulatory period and beyond as we maintain our focus on providing great service to customers and creating long-term value for all of our stakeholders."