North west water provider United Utilities has forecast higher first-half underlying profit and revenue.
However, the FTSE 100 listed company said it expects debt to rise because of a repayment to its pension scheme and the impact of new reporting standards.
United Utilities, which supplies water to three million homes and 200,000 businesses, said it largely benefited from the British water regulator’s incentives for meeting or exceeding targets under multi-year business plans, such as project completions and standards of customer service.
The company said it expects net debt to increase by around £250m at September 30 from the end of March when it stood at £7bn.
It cited the repayment of £100m to its pension scheme and an additional £55m in lease liabilities for the rise in debt.
United Utilities’ gearing is “comfortably within its targeted 55 per cent to 65 per cent net debt to regulatory capital value range.”
Under AMP6, the current price limit period set by UK regulator Ofwat, United Utilities said it is “well placed to deliver” against its targets and has made no material changes to its guidance in terms of regulatory performance.
The company has obtained fast-track status for its business plan under the next price limit period, AMP7, and is confident as it heads toward that period. AMP7 will cover the period from 2020 to 2025.
“We continue to engage constructively with Ofwat and await the final determinations to be published on 11 December 2019,” said United Utilities
