They are a prime target for a takeover. A buy and hold jobby. DYOR

Trading Statement

United Utilities today issues an update for the six months ending 30 September
2012. Current trading is in line with the group's expectations of delivering a
good underlying financial performance for 2012/13. The company continues to
make further progress improving operational performance and customer service
and remains confident of delivering its 2010-15 regulatory outperformance
targets.

Revenue is expected to be higher than last year, reflecting the regulated price
increase for 2012/13. However, as expected, this increase is slightly below the
allowed regulated price rise, principally reflecting the ongoing impact of
customers switching to meters and continued lower commercial volumes. As
outlined previously, the increase in revenue for the full year is anticipated
to be largely balanced by higher depreciation, alongside higher infrastructure
renewals expenditure (IRE) and other operating costs both of which are impacted
by the transfer of private sewers.

Regulatory capital investment and depreciation are expected to be slightly
higher in the second half of 2012/13, compared with the first half of the year.
However, the profile of IRE is anticipated to be smoother across 2012/13 than
in 2011/12, when it was skewed much more towards the second half of the year.
Furthermore, IRE and other operating costs in the first half of 2011/12 were
not impacted by the transfer of private sewers. As a result, the profile of
underlying operating profit is expected to be more evenly distributed between
the first half and second half of 2012/13, compared with 2011/12 when
underlying operating profit was much higher in the first half.

The underlying net finance expense for the first half of 2012/13 is expected to
be moderately lower than the first half of last year. This principally reflects
lower RPI inflation in respect of the group's index-linked debt.

A deferred taxation credit of approximately £50 million will be recognised in
the financial statements for the first half of 2012/13. This follows the UK
government substantively enacting the change to reduce the mainstream rate of
corporation taxation from 24% to 23% from 1 April 2013. A similar credit was
also recognised in the first half of last year.

Group borrowings, net of cash and short term deposits and derivatives, at the
half year are expected to be moderately higher than the position at 31 March
2012. This principally reflects expenditure on the regulatory capital
investment programme, payment of the 2011/12 final dividend and payments in
relation to pensions, interest and tax, partly offset by operational cash
flows. Gearing remains in the middle of Ofwat's assumed range (55% to 65% net
debt to regulatory capital value), reflecting growth in the regulatory capital
value through continued high levels of capital investment coupled with RPI
inflation.

United Utilities will announce its half year results on 28 November 2012.

United Utilities raises profits and dividend
StockMarketWire.com
Waste and water company United Utilities has delivered a strong set of financial results for the six months to end-September.

Revenue was up by £30 million to £823 million, principally as a result of the impact of the regulated price increase for 2012/ 13 of 5.8% nominal (0.6% real price increase plus 5.2% RPI inflation) partially offset by reduced commercial volumes, alongside lower property sales (associated with the water business).

Infrastructure renewals expenditure was up £12 million, reflecting continued progress on the capital investment programme and the impact of the transfer of private sewers.

This spend, alongside an expected increase in depreciation, plus operating expenditure relating to private sewers, resulted in underlying operating profit decreasing by £8 million to £316 million.

Total regulatory capital investment in the half year, including £79 million of infrastructure renewals expenditure, was £354 million, representing an increase of 29% compared with the first half of last year.

Underlying profit before taxation was up 3%, at £190 million. This was as a result of a lower underlying net finance expense, reflecting lower RPI inflation, which more than offset the reduction in underlying operating profit.

Underlying profit after taxation was 5% higher than the first half of last year, at £142 million, reflecting the reduction in the mainstream UK corporation taxation rate.

Reported profit after taxation benefited from a £53 million deferred taxation credit, which follows the UK government's changes to reduce the mainstream corporation taxation rate. A similar credit of £50 million was recognised in the first half of 2011/12.

In line with its policy, the board has declared an interim dividend of 11.44 pence per ordinary share (2011 10.67p).

At 9:22am: (LON:UU.) United Ulilities share price was +11.5p at 680.5p

Interim Management Statement

Trading update

Current trading is in line with the group's expectations.

Revenue has continued to increase at a rate slightly below the allowed
regulated price rise for 2012/13, as expected, reflecting the on-going impact
of a tough economic climate on commercial volumes. Depreciation, power and
other costs have also increased as expected, largely offsetting the increase in
revenue. The company continues to make good progress on its regulatory capital
investment programme and remains on track to invest around £750 million in its
asset base in 2012/13.

Improving operational performance and customer service continue to be top
priorities for United Utilities Water (UUW).

The business met its regulatory leakage target for the sixth consecutive year
in 2011/12 and remains on course to meet its target for 2012/13. Water
resources in the region are robust, with reservoirs currently around 90% full.

UUW's significant progress on Ofwat's customer service measure, the service
incentive mechanism (SIM), in 2011/12 has continued into 2012/13.
Encouragingly, our qualitative SIM results for quarter three 2012/13 have
helped improve our ranking. Building on the performance achieved in the first
half of 2012/13, UUW has now moved up to 12th position out of 21 water
companies on this qualitative measure for the financial year to date. UUW was
16th in 2011/12. Overall SIM performance for 2012/13, including our
quantitative SIM score, will be published, along with the industry's results,
after the financial year end.

In addition, the number of customer complaints UUW received via the Consumer
Council for Water (CCW) has reduced further in the three months to December
2012 and, importantly, there have been no customer complaints requiring
investigation by the CCW in the first nine months of the 2012/13 financial
year. This improved performance will positively contribute to Ofwat's
quantitative SIM assessment.

Final Results

RBC note today:
"We maintain our Underperform recommendation for UU with a lower 650p price target. Its current 7% trading premium-to-RCV valuation, buoyed by recent M&A news, does not appropriately capture the risks of (i) an unfavourable AMP6 regulatory outcome particularly on Average Cost-to-Serve (ACTS); and (ii) a 15% dividend cut in FY16 which we see as necessary in light of UU’s deteriorating credit metrics.
The next step for the ongoing PR14 process is July's final framework and methodology statement. We expect little by way of financial parameters in this statement, though the statement may provide some early insights on Ofwat’s approach to clawing back financing outperformance and its final ACTS methodology. ACTS is currently the single most exposed risk area for UU, where the company estimates that it may lose “over £300m” in revenues across the five-year period.
In light of an anticipated harsher regulatory settlement, particularly with regards to the ACTS, we reiterate our call for a dividend cut of 15% in FY16 for UU as we see UU’s credit metrics and dividend payout ratio deteriorating across AMP6. We see FY16 DPS rebased at 32.3p (4.4% yield). Importantly, our call differs from consensus which sees FY16 DPS of 37.0p or just a 2% dividend cut from FY15.
Despite the recent approach by the LongRiver consortium to acquire SVT, we see UU as an unlikely M&A target at the moment particularly as we advance further into the current AMP6 price review where regulatory risk is relatively high. Furthermore, the scale of UU and the limited pool of potential remaining deep-pocketed suitors for UK water companies limits the likelihood of further M&A.
UU is currently trading at a 7% premium to the FY14E RCV which we believe does not fully reflect the regulatory and dividend risks. As we enter the more advanced stages of PR14, we believe an Underperform recommendation remains appropriate. Our 650p price target uses a 2% premium to RCV, and reflects the risks we see from the allowed rate of return being cut to 4.0% post-tax-real (from 4.5% currently) and the knock–on risk of a 15% dividend at the start of AMP6."

Interim Management Statement and AGM

Trading Statement

Half Yearly Report

On board as of today. Paid 646. Tried to pick bottom, but failed again.

Interim Management Statement

StockMarketWire.com
Analysts at Deutsche Bank believe the recent announcement from OFWAT on financial parameters and incentives is helping improve regulatory visibility, specifically on returns, and should enable UK water companies to outperform, going forward. The broker believes another likely outcome of the review will be to provide companies with flexibility over cashflow which, in turn, should support steady dividend growth. Deutsche has therefore upgraded its recommendations for Severn Trent (LON:SVT) and Pennon (LON:PNN) to "buy" from "hold" and reaffirmed its existing "buy" rating on United Utilities. Target price have been increased across the board with SVT rising to 2,000 pence per share (from 1,550 pence), PNN to 800 pence (from 650 pence) and UU to 1,000 pence (from 800 pence). "Within a year we believe the sector will have regulatory and dividend visibility and a resumption of bid speculation is possible," the broker said in a note to clients. "These factors could drive a re-rating of listed water stocks to levels comparable with UK and US regulated peers." Given an implied upside of around 30 per cent to its upgraded target price, Deutsche highlights United Utilities as its top pick in the sector.

Final Results

Interim Management Statement and AGM

Trading Statement

Current trading is in line with the group's expectations for the six months
ending 30 September 2014. Customer service continues to improve, underpinned by
good operational and environmental performance. The company remains confident
of delivering its 2010-15 regulatory outperformance targets.

Operational performance

United Utilities has delivered significant improvements in customer service
over the last few years and we continue to make progress, supported by a
further reduction in customer complaints. Our asset serviceability performance
has been good, with all four major asset classes rated either `stable' or
`improving'. This good performance has been recognised in Ofwat's draft
determinations in August, with no penalties relating to the service incentive
mechanism (SIM) or asset serviceability. This is underpinned by top quartile
operational performance, as measured through Ofwat's key performance indicators
and the Environment Agency's assessment.

Capital delivery

Our capital delivery performance in this regulatory period has been good and
planned investment is continuing at high levels, as we invest to maintain and
improve services for customers and deliver further environmental benefits. This
capital programme also makes a significant contribution to the regional
economy, providing new investment and supporting employment. Regulatory capital
investment for 2014/15, including infrastructure renewals expenditure, is
expected to be similar to the high level of investment we made in 2013/14.

Financials

Underlying operating profit for the first half of 2014/15 is anticipated to be
similar to the first half of 2013/14. This principally reflects an allowed
regulated price rise offset by the impact of the previously announced special
customer discount and the expected increase in depreciation and other cost
pressures, including bad debt. The underlying net finance expense for the first
half of 2014/15 is anticipated to be slightly lower than the first half of last
year, primarily reflecting the impact of lower RPI inflation on our
index-linked debt.

As the company continues to invest in its asset base, group net debt at 30
September 2014 is expected to be slightly higher than the position at 31 March
2014. This principally reflects regulatory capital expenditure, payment of the
2013/14 final dividend and payments in relation to interest and taxation,
largely offset by operational cash flows. Gearing remains well within Ofwat's
2010-15 assumed range of 55% to 65% net debt to regulatory capital value. This
supports a solid A3 credit rating for United Utilities Water (UUW). The group
has financing headroom into 2016.

Accounting change

From 1 April 2014, a change under IFRS11 impacts the accounting treatment of
the group's investment in Tallinn Water (moving from proportional consolidation
to equity accounting). As a result, the prior year financial statements will be
re-presented to reflect this, reducing underlying operating profit for the
first half of 2013/14 by around £4 million, but with minimal impact on
underlying profit before tax.

Price review 2014

As part of the 2014 price review process, on 29 August 2014, Ofwat published
its draft determinations for UUW covering the period 1 April 2015 to 31 March
2020. UUW is engaged in detailed dialogue with Ofwat, alongside its on-going
discussions with other stakeholders, with particular focus on the wholesale
total expenditure differences between UUW's business plan and Ofwat's draft
determinations. UUW is scheduled to submit its response to the regulator by 3
October 2014. Ofwat is expected to publish final determinations on 12 December
2014.

United Utilities will announce its half year results on 26 November 2014.

Morgan Stanley Equal weight 807.00 808.00 865.00 875.00 Reiterates

I'm out today Skinny. 911.5 was too tempting. I've had a very good ride up from 646 last December so I can't complain.

Half Year Results

· Operational improvements delivering benefits for customers
o significant improvements in AMP5 on Ofwat's SIM measure recognised in draft determination
o upper quartile performance on Ofwat and Environment Agency KPI assessments
o good asset serviceability performance recognised in draft determination
o reinvesting c£280m of outperformance for the benefit of all stakeholders

· Continued effective delivery of capital investment programme
o strong capital delivery performance; Time: Cost: Quality index (TCQi) remains over 95%
o continued high levels of capital investment, expect to invest c£850m in 2014/15

· Good financials
o underlying operating profit up £3m to £343m, after c£13m one-off special customer discount
o RCV gearing at 57%, within Ofwat's 2010-15 assumed range
o interim dividend of 12.56 pence per share, in line with policy

· Further growth in Business Retail
o most successful new entrant in Scotland
o continuing to offer and develop a range of value-added services

OFWAT PUBLISHES FINAL DETERMINATION FOR UNITED UTILITIES

As part of the 2014 price review process, Ofwat has today, as scheduled, published the final determination for United Utilities Water Limited (UUW) covering the period 1 April 2015 to 31 March 2020.

UUW is reviewing this and has two months in which to consider and decide whether to accept its final determination.

Final Results

· Step change in performance in 2010-15 regulatory period delivers benefits for all stakeholders
o significant customer service improvements, as measured through Ofwat's SIM mechanism
o much improved delivery of capital investment programme; Time:Cost:Quality index above 95%
o investment totalling c£3.8bn over the five years, enhancing assets and services for customers
o upper quartile operational performance on Ofwat and Environment Agency KPI assessments
o strong shareholder returns and dividend policy delivered
o exceeded regulatory outperformance targets, enabling us to reinvest c£280m to benefit customers
o responsible business practice, reflected by Dow Jones Sustainability Index 'World Class' rating

· Strong 2014/15 financial performance
o underlying operating profit up £30m to £664m
o RCV gearing at 59%, well within our target range of 55% to 65%
o final dividend of 25.14 pence per share (total for the year of 37.70 pence), in line with policy

· Good platform to deliver further value in next regulatory period
o already a leading operational performer, providing a solid foundation for further improvements
o 'systems thinking' approach, leveraging technology and data intelligence to improve efficiency
o regulatory capital investment of £3.5bn+; network resilience, customer and environmental benefits
o robust capital structure and strong credit ratings
o dividend growth rate target of at least RPI inflation each year through to 2020
o below inflation growth in average household bills for the decade to 2020

Infected tap water in Lancashire 'must be boiled', authorities say
Panic buying of bottled water starts after United Utilities warn microscopic bug that can cause sickness and diarrhoea has infected all tap water across Lancashire.
Hundreds of thousands of people in Lancashire are being warned to boil their tap water before use to kill a microscopic bug.
Tests at a water treatment plant have found traces of cryptosporidium, which can cause sickness and diarrhoea.
The warning covers a large area of Lancashire including Blackpool, Preston, Chorley and the Fylde coast.
Water firm United Utilities are advising all customers to boil their water for all drinking, food preparation and teeth brushing as a precaution until further notice.
The alert sparked panic buying of bottled water, with stocks snapped up at supermarkets, shops and petrol stations across the county.
Residents can continue to use tap water without boiling for general domestic purposes such as bathing, flushing toilets or washing clothes.

http://www.telegraph.co.uk/news/health/news/11789187/Infected-tap-water-in-Lancashire-must-be-boiled-authorities-say.html