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United Utilities underlying profit falls 16% as pricing controls reduce revenue
StockMarketWire.com
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Water supplier United Utilities posted a 16% fall in first-half underlying profit after new pricing controls hurt its revenue.
Pre-tax profit for the six months through September, which included adjusted items such as restructuring costs, rose 2.1% to £162.0 million, up from £158.6 million year-on-year.
Underlying pre-tax profit fell 16% to £174.0 million, down from £207.2 million, as revenue fell 4.4% to £894.4 million.
United Utilities declared an interim dividend to 14.41p, up 1.5% year-on-year.
The company said the fall in revenue largely reflected an average customer bill reduction delivered for this first year of the new AMP7 regulatory period.
The impact of the Covid-19 pandemic and related lockdown periods had seen non-household revenues decrease by around £40 million, with an increase in household revenue of around £26 million as a result of more time spent at home and the hot, dry weather towards the end of spring.
Chief executive Steve Mogford said average customer bills have reduced by 7% in real terms this year, adding 'but we recognise that for many in our region, these are still challenging times'.
'For those struggling to pay their bills, we offer the sector's widest range of financial assistance schemes. We have also acted swiftly to increase the number of customers eligible for reduced tariffs.'
Mogford said United Utilities now had a clearer understanding of the impact of Covid-19 on its business which he said remained robust and was supported by a strong balance sheet.
'This, together with a stabilised inflation outlook supported by central bank policy and government actions, gives us the confidence to reaffirm our responsible AMP7 dividend policy of growth in line with CPIH inflation.'
Story provided by StockMarketWire.com
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