United Utilities is reporting strong performance during AMP7 and outperformance on its regulatory contract with the announcement this morning of its full year results for the year to 31 March 2025.

Commenting on its AMP8 financial framework, United Utilities says it is targeting to outperform the regulatory contract by at least 100 bps, a capital investment of around £9 billion and aiming to maintain gearing within a target range of 55-65%. The water company has accepted Ofwat’s final determination for AMP8, which will see its largest investment programme in more than 100 years.

Financial highlights for the year ending 31 March 2025 include:

• Underlying operating profit of £634m, reported operating profit of £632m
• Underlying EPS of 49.6p, up from 33.3p, and reported EPS of 38.8p
• Low level gearing at 60% and fully equity funded for AMP8, with robust credit ratings
• Liquidity extending into 2027
• Recommended final dividend of 34.57p, in line with policy
• Capital investment of £1,083m, a 47 per cent increase on prior year

Operational highlights flagged up by the water company during the year include:

• Top quartile performer, meeting or beating around 80 per cent of targets over the AMP, the highest average performance in the industry
• Cumulative ODI rewards of £129 million for AMP7, on a real post-tax basis having earned a reward in every year of the AMP
• 39 per cent reduction in spills from overflows since 2020, with almost 20,000 fewer spills than last year and 31 per cent lower duration, despite continued high levels of rainfall
• 4 star 'industry leading' EPA rating for 2023, having achieved the top 3 and 4 star ratings in every year of the EA's Environmental Performance Assessment to date
• Consistently strong performance against the MeX's, one of only three companies achieving a reward in both CMeX and DMeX in every year, and the third highest CMeX reward in AMP7
• Helped 414,000 customers with affordability support in the last five years, and around 540,000 customers registered to receive tailored support through Priority Services
• Highly committed colleagues, with 87 per cent engagement scoring 7 points higher than the UK high performance norm

The company has recently reached the halfway point in its eight-year project upgrading the Vyrnwy Aqueduct to improve water quality for a million customers, which has been delivered on time and within budget. United Utilities also have a number of key strategic projects underway through AMP8 to deliver further improvements to water quality.

Rivers have been an area of particular focus for United Utilities, with improvements delivered through AMP7 commitments, and the fast start made on tackling spills from storm overflows.

Between the additional AMP7 investment, accelerating delivery of its Better Rivers programme, and AMP8 investment brought forward targeting some of the highest spilling sites, the company says it has made big strides.

2024 saw almost 20,000 fewer spills than 2023 and a 31 per cent reduction in duration. Despite the intense periods of rainfall during the year, spills per overflow are down 39 per cent since 2020.

However, while the utility says it has made excellent progress and exceeded its target of a one-third reduction by 2025, United Utilities acknowledges that “there remains a long way to go”, saying its industry-leading AMP8 spill reduction programme will help it to deliver an even bigger step change. Ahead of AMP8, the company has been building new capability, using an innovative five-county approach, and undertaking early supplier onboarding. "Alongside our strong track record, this gives us confidence that we can successfully deliver our ambitious investment programme", the company said.

Louise Beardmore, Chief Executive Officer, commented:

"We have delivered another strong set of results for customers, communities and the environment in the North West. Our focus on performance has seen us meet or surpass around 80 per cent of our performance targets over the last five years, the best performance of any water company.

"Our long-term strategy of investment helped us cut spills per storm overflow by 24 per cent last year, a total of 20,000 fewer spills and the biggest year-on-year reduction in the sector. We are one of only three companies to have achieved our customer targets for services provided to families, businesses and housing developers every year, and at the same time we have helped more than 400,000 households in the North West with affordability support since 2020.

"Looking to the future, we have already started work on our ambitious £13 billion plan for the next five years - the biggest investment in improving water and wastewater infrastructure in more than a century. We're proud our plans will deliver a huge boost to customers and communities across the North West, supporting 30,000 jobs and creating an estimated £35 billion of economic value for the region."