United Utilities on track despite rising costs

22nd Sep 2011 12:04

Water group United Utilities has assured that it is on track to meet its targets for the six months ending 30 September, despite rising costs."Current trading is in line with the group's expectations and the company's operational and efficiency initiatives continue to progress well," the firm said.Revenue will be higher than the first half of last year, helped by the 4.5% regulated price increase for 2011/12, as a 0.2% fall in real prices was outweighed by a 4.7% rise in retail price index inflation.However, the company has reiterated that it expects operating expenses to be above last year, due to higher infrastructure renewals expenditure and depreciation, as well as "other inflationary cost pressures".The company predicts that regulatory capital investment and depreciation will be higher in the second half.Nevertheless, the firm said that its interim results will see a deferred taxation credit of £50m, after the government reduced the mainstream rate of corporation tax.The stock was 2.38% down at 595.5p by 12:22, outperforming the relative FTSE 100 index which has tumbled 4.81%.BC