United Utilities slightly ahead

24th Nov 2010 07:21

Interim results from water supplier United Utilities were slightly ahead of management expectations.In the six months to 30 September the company made an underlying profit before tax of £196.2m, down from £258.2m the year before.Reported profit before tax tumbled to £122.2m from £189.9m the year before and was reduced by a £16m one-off charge, £55m of fair value movements and £3m of net pension interest expense.Underlying earnings per share, at 20.4p, were down from 27.2p last year but ahead of Charles Stanley's forecast of 17.5p.As expected, the interim dividend was trimmed, to 10p from 11.17p, though this was higher than the 9.8p predicted by Charles Stanley. "With the programme of actions we are implementing, we are confident of delivering outperformance over the 2010-15 period with financing outperformance already secured. We have continued to make high levels of investment in our water and wastewater assets, with capital expenditure of over £300 million in the half year, providing further benefits for customers, shareholders and the environment," said chief executive Philip Green."United Utilities has a robust capital structure and the business should benefit from predictable regulated revenue streams over the next five years. The group's well defined dividend policy, with a growth target of two per cent per annum above inflation through to 2015, provides clarity for shareholders," Green added.Gearing decreased to 62% at 30 September 2010, compared with 64% at 31 March 2010.On the customer side, satisfaction levels are at their highest levels ever and the company is on track to meet its regulatory leakage target for the fifth consecutive year.