United Utilities Group plc (LON:UU) has announced half-year results for the six-month period to 30 September 2024.
Louise Beardmore, United Utilities Chief Executive Officer, said:
“We have delivered a robust set of operational and financial results. In October we were confirmed as the leading water and sewerage company by Ofwat on a suite of performance measures (ODIs) in 2023/24, delivering on the things that matter most to customers. In July the Environment Agency awarded us the top 4-star rating in its 2023 assessment, and we continue to support customers with affordability assistance having helped over 400,000 families since 2020.
“Improving rivers continues to be a key area of focus. We are already making progress at reducing spills from storm overflows, having commenced a programme of accelerated solutions. Our five-year plan builds on this, with a step-change in investment, and last week we announced that we would go further and faster, accelerating more work to reduce spills. By 2030, we will deliver improvements at more than 1,100 overflows across the North West.
“Looking ahead, we continue to evolve our plan for the next five years, with ambitious investment proposals to build a stronger, greener and healthier North West. This will see us invest significantly in new infrastructure, supporting 30,000 jobs and aligning with the Government’s ambitions for economic growth in the region.”
Key financials – six months ended 30 September
| Reported | Underlying1 | |||||
| £m | 2024 | 2023 | % change | 2024 | 2023 | % change |
| Revenue2 | 1,082.0 | 975.4 | +10.9% | 1,082.0 | 975.4 | +10.9% |
| Operating profit | 333.4 | 240.6 | +38.6% | 335.7 | 271.1 | +23.8% |
| Profit before tax | 140.6 | 160.0 | -12.1% | 182.9 | 90.3 | +102.5% |
| Profit after tax | 103.1 | 116.8 | -11.7% | 182.9 | 90.3 | +102.5% |
| EPS (pence) | 15.1 | 17.1 | -11.7% | 26.8 | 13.2 | +102.5% |
| 2024 | 2023 | % change | |
| Interim DPS (pence) | 17.28 | 16.59 | +4.2% |
| Net regulatory capex (£m) | 466.9 | 371.8 | +25.6% |
| RCV3 (£m) | 14,946 | 14,406 | +3.7% |
| Net debt (£m) | 9,051 | 8,541 | +6.0% |
| RCV gearing4 (%) | 60% | 59% | +1.0% |
Operational highlights
· Highest ODI5 reward in the sector in FY24, and on track to perform at least as well in FY25
· 4-star status in the EA’s latest Environmental Performance Assessment for 2023
· Accelerating spill reductions, making improvements at over 1,100 storm overflows by 2030
· Continued focus on leakage, with innovative techniques helping us to fix more leaks
· Supporting customers, with over 475,000 households on Priority Services register and almost 400,000 customers supported through affordability schemes so far this AMP
· Strong performance across Measures of Experience, ranking 1st place for the first time on developer experience (D-MeX) and 1st placed WaSC6 for retailer experience (R-MeX)
Financial highlights
· Underlying operating profit of £336m, reported operating profit of £333m
· Underlying EPS of 26.8p, up from 13.2p, reported EPS of 15.1p
· Low level of gearing at 60% and solid credit ratings providing future financial flexibility
· £2.6 billion of liquidity extending into FY27; AMP8 funding underway
· Interim dividend of 17.28p, in line with policy
Financial framework for current AMP7 regulatory period and FY25 guidance
· Targeting to achieve an FY25 net ODI reward at least in line with FY24
· Narrowed capex range to the upside, with revised guidance now £950 million to £1.1 billion
· Forecast average real RoRE7 of 6-8%
· RCV growth of 4-5% nominal compound annual growth rate
· Maintain gearing within target range of 55-65%
Regulatory update
· Draft determination received in July, confirming efficiency of our base costs and a significant increase in totex compared with previous periods
· Response submitted in August, providing further detail to support our investment plans and highlighting other areas for consideration by Ofwat
· Final Determination expected on 19 December 2024
Half year results presentation webcast – Thursday 14 November 2024
There will be a presentation available on our website from 7am at the following link:
www.unitedutilities.com/corporate/investors/results-and-presentations/full-and-half-year-results/
This will be followed by a Q&A with management at 9am, which can be accessed as follows:
https://us06web.zoom.us/j/89864389458?pwd=emXtREKkkn8Kd3KIicjbx33hUx8RNI.1
Meeting ID: 898 6438 9458, Passcode: 932761
Notes
1 Underlying measures are defined in the tables in the underlying profit section below.
2 Revenue for the six months to 30 September 2023 has been re-presented to reflect £6.6 million of income not derived from the output of the group’s ordinary activities in ‘Other income’ rather than in revenue.
3 United Utilities Water Limited’s adjusted RCV (adjusted for actual spend, timing differences and including full expected value of AMP7 ex-post adjustment mechanisms).
4 RCV gearing calculated as group net debt including loan receivable from joint venture/United Utilities Water Limited’s adjusted RCV (adjusted for actual spend, timing differences and including full expected value of AMP7 ex-post adjustment mechanisms).
5 Outcome Delivery Incentive
6 Water and Sewerage Company
7 Return on regulatory equity
