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United Utilities predicts drop in 2020/21 revenue
StockMarketWire.com
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United Utilities expects group revenue to be lower this year, reflecting the reduction in 'allowed regulatory revenue', with lower consumption from businesses as a result of Covid-19 largely offset by higher consumption from households.
In a trading update, the company also said it expects underlying operating profit to be lower than 2019/20 largely reflecting the lower revenue and higher infrastructure renewals expenditure (IRE).
The underlying net finance expense for 2020/21 is likely to be around £100 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.
As the company continues to invest in its asset base it expects a small increase in group net debt at 31 March 2021 compared with the position as at 30 September 2020.
Earlier this year, it announced the sale of the company's 35.3 per cent stake in Tallinn Water (AS Tallinna Vesi) for cash consideration of €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 £70 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, United Utilities expects to convert £32.5 million of existing working capital loans to Water Plus into long term fixed capital.
Story provided by StockMarketWire.com
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