United Utilities to rebase dividend

21st Jan 2010 07:18

Water company United Utilities is to cut its dividend as it seeks to conserve cash to meet the requirements of the industry regulator’s price review.The group has decided not to seek a referral to the Competition Commission of what it termed a ‘challenging price review’ by water regulator Ofwat.‘In light of our efficiency plans, we are well prepared to meet the requirements of the review. In addition, we believe we can deliver outperformance in a number of areas, particularly financing,’ the group’s chief executive Philip Green said.The company said it will rebase the dividend to 30p a share for fiscal 2010/11 and thereafter will continue with its policy of targeting dividend growth of 2% above the inflation rate per annum.The board expects to grow the final dividend for 2009/10 by 5%, which would make the total dividend for the year 34.3p.The group added that trading since the beginning of October has been in line with expectations, with net debt easing slightly during the period.