United Utilities has said it is “well protected against financial shocks” that may be experienced as a result of the Coronavirus outbreak in the short to medium term.

In a trading update published today ahead of its full year results on 22 May 2020, the company said it had enacted robust contingency plans in response to the COVID-19 outbreak. The measures are designed to protect employees to ensure the company can continue to provide a great public service to customers.

However, the utility added it recognised that there is a significant degree of uncertainty associated with how the current situation develops and will therefore continue to closely monitor its position and approach.

According to the update, current trading is in line with the group's expectations for the year ending 31 March 2020. However, the severe winter storms in February caused some service interruptions that will reduce United Utilities’ anticipated Outcome Delivery Incentives for AMP6 to a net reward of around £40 million from around £50 million previously.

The company said it was well prepared for AMP7 - United Utilities is expecting to deliver further improvements in AMP7 and beyond.

Group revenue is expected to be higher than last year, largely reflecting allowed regulatory revenue changes. Underlying operating profit for 2019/20 is also expected to be higher than 2018/19, while Underlying infrastructure renewals expenditure in the second half of 2019/20 is expected to be higher than the first half of the year.

However, reported operating profit will be impacted by an accelerated depreciation charge of around £80 million in relation to Bioresources assets. The utility said this was consistent with the expected level and allocation of RCV to Bioresources included in its business plan submissions and final determination.

The economic climate is also expected to affect the ability of business customers to pay United Utilities’ joint venture company, Water Plus. Despite making good progress on issues that impacted underlying operating performance in the first half of the year, its recovery plan is “now likely to be far more challenging, take longer and be less certain,” the update says.