Profits lower at United Utilities

21st May 2010 07:13

Higher borrowing costs knocked United Utilities profits last year despite an increase in the contribution from the core water business.Pre-tax profits in the year to March fell to £474m from £529m, with underlying profits coming in at £500m against £531m, slightly below forecasts. Revenues rose slightly to £2.44bn from £2.43bn with turnover in the regulated businesses up 3% to £1.54bn. That reflected a price increase of 6%, which offset lower water demand due to the economic climate. Operating profits in the water business rose to £701m with cost cuts offsetting higher depreciation, bad debts and higher power costs.For the coming year United has to bear a real price decrease of 4.3% and further cuts of 0.4% per year over the next four years. The final dividend rises by 5.0% to 23.13p per share, for a total for the year of 34.3p."We are well positioned for the 2010-15 regulatory period. With the detailed efficiency plans we are implementing and the low cost of the group's debtportfolio, we believe we can deliver outperformance over the five years, " chief executive Philip Green said.