United Utilities make profit mark
United Utilities is the UK’s largest listed water company who own, operate and maintain utility assets, including water, wastewater, electricity and gas. The FTSE 100 company has a turnover of £2 billion and is the UK’s market leader in utility outsourcing, and as reported by thebusinessdesk.com United Utilities is on track to meet City expectations for its half year figures. Shares were hit recently on speculation that the company was launching a rights issue to boost the balance sheet – there has been no comment to back this up but United Utilities did say that it had ‘headroom’ to cover its financing needs to the second half of 2011.
The utility company said that underlying operating profit in its regulated business for the six month period ending September, would be broadly in line with last year thus reflecting revenue and cost pressures, and had also incurred one off costs of around £10 million in the half year, due to the restructuring of the business into regulated and non-regulated activities.
A United Utilities spokesperson commented that office and administration costs have been reviewed and that they had taken away some agency staff as part of the company’s renewed focus on the regulated activity.
The article continues by stating that UU remarked that in its trading update, reduced demand for water means that revenue growth in its regulated business for the year would be lower than the 6% price rise which is allowed by the regulator.
UU stated that they are facing cost pressures in areas such as power and bad debts, as well as an increase in depreciation however, regarding funding, the utility provider confirmed that since the start of the 2009/10 financial year it has improved its liquidity position through the issue of three new long-term bonds worth £220 million.
Source;
Thebusinessdesk.com/ News (UU on track to meet profit targets)