United Utilities Group PLC United Utilities Trading Update (4096T)
March 25 2021 - 02:00AM
UK Regulatory
TIDMUU.
RNS Number : 4096T
United Utilities Group PLC
25 March 2021
United Utilities Group PLC
25 March 2021
UNITED UTILITIES TRADING UPDATE
United Utilities announces the following trading update ahead of
its full year results on 27 May 2021.
Current trading is in line with the group's expectations for the
year ending 31 March 2021.
Performing strongly
We have continued to perform strongly during the Covid-19
pandemic and to deliver excellent operational performance. We are
on track to record our lowest ever level of leakage and the
interruptions to water supply our customers experience has more
than halved in the last 12 months. Our performance in relation to
serious pollution incidents is the best in the sector with zero
incidents for two consecutive years and we are on track to achieve
the industry leading four star rating with the Environment Agency
in its annual assessment for 2020.
As a result of our excellent performance for customers and the
environment, we expect to achieve a reward of up to GBP20 million
against our customer outcome delivery incentives (ODIs) for this
year.
A digital utility
Through our unique Systems Thinking approach we make extensive
use of technology, automation and machine intelligence in order to
deliver better performance for customers and the environment. For
example, hi-tech sensors in our pipe network allow us to spot
potential leaks early and deal with them - reducing the risk of
serious disruption for customers, as well as expensive repair work,
further down the line. Since 2014, our purpose built technical
training academy has provided skills development and certification
to over 2,500 people and through the integration of our new digital
skills academy, we ensure that we have the in-house skills to
develop and deploy breakthrough technologies at pace and
efficiently. The deployment of Systems Thinking is delivering
tangible benefits to all our stakeholders.
ESG at our heart
Earlier this year we were delighted to be placed in the top 1
per cent of 15,000 companies across Europe in the Financial Times'
Statista Survey for Diversity and Inclusion Leadership. This is
further recognition of our long-standing commitment to ESG
alongside the progress we are making in other areas such as our six
carbon pledges, which include a clear commitment to adopting
science-based targets, and driving the sector's commitment to hit
"net zero" by 2030.
Financial resilience
Cash collection from our household customer base remains strong.
Although the pace and scale of the economic recovery from the
Covid-19 pandemic remains uncertain, our extended social tariff and
extensive range of financial assistance schemes underpin our
confidence in our ability to limit any ongoing impact.
Group revenue is expected to be lower than last year, mainly
reflecting the reduction in our allowed regulatory revenue, with
lower consumption from businesses as a result of Covid-19 largely
offset by higher consumption from households. Overall, the net
reduction in revenue is expected to be around 3 per cent.
Underlying operating profit for 2020/21 is expected to be lower
than 2019/20 largely reflecting the lower revenue and higher
infrastructure renewals expenditure (IRE).
At the full year, we will be simplifying our approach to
alternative performance measures (APMs) and will no longer, as a
matter of course, adjust our underlying earnings for restructuring
costs, net pension interest, capitalised borrowing costs and prior
years' tax matters.
We expect the underlying net finance expense for 2020/21 to be
around GBP100 million lower than in 2019/20 with roughly half of
the reduction due to lower inflation applied to the group's
index-linked debt and half due to the change in APMs.
Earlier this year we announced the sale of the company's 35.3
per cent stake in Tallinn Water (AS Tallinna Vesi) for cash
consideration of EUR 100.26 million. Given the one-off nature of
this transaction, the profit generated on disposal will be excluded
from the underlying results.
In November 2020, Water Plus agreed a GBP70 million financing
facility with Royal Bank of Scotland (RBS) and reduced the balance
drawn on its facilities with United Utilities and Severn Trent. To
provide a robust platform from which Water Plus can make a strong
recovery as its business customers emerge from the Covid-19
pandemic, we expect to convert GBP32.5 million of existing working
capital loans from United Utilities to Water Plus into long term
fixed capital.
As the company continues to invest in its asset base we expect a
small increase in group net debt at 31 March 2021 compared with the
position as at 30 September 2020.
Our responsible approach to financial risk management continues
to deliver benefits, including a strong balance sheet, a stable
IFRS pension surplus and gearing within our target range supporting
a solid A3 credit rating for United Utilities Water with
Moody's.
United Utilities contacts:
Gaynor Kenyon, Corporate Affairs
Director +44 (0) 7753 622282
Robert Lee, Head of Investor
Relations +44 (0) 1925 237033
Graeme Wilson, Tulchan Communications +44 (0) 20 7353 4200
LEI 2138002IEYQAOC88ZJ59
Classification - Trading update
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