Revenue rising at United Utilities as water price goes up

1st Feb 2012 07:13

Water utility company United Utilities is on track to deliver full year results in line with expectations on the back of steadily rising revenues.In the first half of its current fiscal year, which runs to the end of March, revenue was up by about 4% year-on-year and this trend has continued into the second half.The news has gone down well with investors, with the stock up 1% by 10:15am. However, for consumers the story is rather more complicated. The water industry regulator, Ofwat, says average bills will rise by £20 to £376 this year, that's an above inflation rise of 5.7%. United is set to benefit from the price rises although it is arguing customers are getting better value for money. The firm says it has moved up four places to fifth position, out of the ten water and sewerage companies, based on the water regulator Ofwat's third quarter assessment. United Utilities is currently in eighth position on this measure for the financial year to date. "Encouragingly, the number of customer complaints received via the Consumer Council for Water has reduced further in the three months to December 2011, positively contributing to Ofwat's quantitative SIM assessment," United Utilities said.The group added that it is on course to meet its 2011/2012 regulatory leakage target.As expected, group net debt is slightly higher, compared with the position at 30 September 2011, principally reflecting ongoing high levels of capital investment and after taking account of the 2011/12 interim dividend payment.Gearing remains stable and in the middle of Ofwat's assumed range (55% to 65% net debt to regulatory capital value), supporting a solid A3 credit rating.jh bs