United Utilities Group PLC (LON: UU.) today provided full year results for the year ended 31st March 2019.
Putting customers first
· 10% real reduction in average household bills since 2010, alongside improving customer service
· The sector’s most innovative assistance schemes supporting over 100,000 customers struggling to pay
· Achieved our best ever customer satisfaction SIM scores, anticipating a reward of around £16m for AMP6
Achieved fast-track status for next regulatory period (AMP7)
· Awarded the highest grades for the sector in Ofwat’s initial assessment of company business plans
· Fast-track status secures greater clarity with a year to go before the start of AMP7
· AMP6 additional investment increased by £100m to facilitate a flying start to AMP7
· Total outperformance sharing now £350m in AMP6 and over £600m across AMPs 5 and 6
Strong operational performance delivering shareholder value
· Pioneering Systems Thinking approach delivering sustained improvement in both operational performance and service for customers
· Leakage target met for 13 consecutive years
· Confident of delivering totex outperformance of £100m against our AMP6 scope
· Net wholesale ODI reward of £19m for the year, expect cumulative AMP6 reward of around £30m
Strong financial performance
· Underlying operating profit of £684.8m (reported operating profit of £634.9m)
· Dividend in line with AMP6 growth policy
· IFRS pension surplus of £484m at 31 March 2019, pension funding deficit eliminated in April 2019
· Robust capital structure providing resilience and future financial flexibility
Untitled
| Key Financials | ||
| 31-Mar-19 | 31-Mar-18 | |
| Revenue | £1,818.5m | £1,735.8m |
| Reported operating profit | £634.9m | £636.4m |
| Underlying operating profit1 | £684.8m | £645.1m |
| Reported profit after tax | £363.4m | £354.6m |
| Underlying profit after tax1 | £378.7m | £304.9m |
| Total dividend per ordinary share (pence) | 41.28p | 39.73p |
| Net regulatory capital spend | £821.0m | £816.1m |
| RCV gearing2 | 61% | 61% |
1 Underlying profit measures have been provided to give a more representative view of business performance and are defined in the underlying profit measure tables
2 Regulatory capital value (RCV) gearing calculated as group net debt/United Utilities Water’s shadow RCV (outturn prices)
Steve Mogford, United Utilities Group PLC Chief Executive Officer, said:
“Always operating in the best interests of customers is at the very heart of our operations and this is reflected in our best ever customer satisfaction scores. We have taken the lead in transforming how the sector supports customers, particularly those in vulnerable circumstances, and have delivered more for customers whilst reducing bills by 10 per cent in real terms since 2010.
“We are achieving leading and sustainable results across many areas of operational performance, benefiting from the investment that we accelerated into the early years of the current regulatory period and from our deeply embedded innovation culture that is considered to be the best in the sector. Our Systems Thinking approach has underpinned a strong performance on our outcome delivery incentives against a backdrop of increasingly challenging targets and maintaining resilient services to customers during the extreme periods of weather in 2018.
“Ofwat’s fast-track assessment of our 2020-2025 business plan – that achieved the highest grades for the sector – reflects the quality of our future plans and the performance improvements we have already delivered. We are increasing our additional investment by another £100 million, to total £350 million, to accelerate the delivery of further performance improvements and facilitate a flying start to the next regulatory period. We are well placed for the remainder of the current regulatory period and beyond as we maintain our focus on providing great service to customers and creating long-term value for all of our stakeholders.”
