United Utilities Group PLC United Utilities Trading Update (9680M)
September 27 2021 - 2:00AM
UK Regulatory
TIDMUU.
RNS Number : 9680M
United Utilities Group PLC
27 September 2021
United Utilities Group PLC
27 September 2021
UNITED UTILITIES TRADING UPDATE
United Utilities announces the following trading update ahead of
its half year results on 24 November 2021.
Current trading is in line with the group's expectations for the
six months ending 30 September 2021.
Supporting customers
We continue to deliver high levels of customer satisfaction and
provide services to more than 7 million customers in the North
West. Our customer facing teams work incredibly hard to help those
struggling financially, with around 200,000 customers currently
benefitting from our affordability schemes we are supporting more
customers than ever before.
We have continued to build on our long track record of
innovating to improve service and enhance the customer experience,
reflected in our C-MeX and D-MeX scores for which we have earned a
reward against both measures for 2020/21.
Leading environmental performance
In the Environment Agency's latest annual assessment of
environmental performance, we achieved the top 4 star ranking and
were assessed as "green" across all six areas that the Agency
assessed. This is the fourth time in the last 6 years we have
earned this top rating.
Securing a low carbon future
In July we became the first UK water company to have
science-based targets, including supply chain (scope 3) targets,
approved by the Science Based Targets initiative (SBTi). The SBTi
is widely accepted as providing the gold standard approval for
carbon emission reduction targets. Our new scope 3 emissions
targets, with measures including both supplier engagement and an
absolute reduction, further develop our carbon strategy and
demonstrate our ambition to net zero from 2030.
Financial performance
Our AMP7 guidance on regulatory performance remains unchanged
from that given at our full year results in May 2021.
Group revenue for the first half of 2021/22 is expected to be
higher than the first half of last year, mainly reflecting higher
consumption only partially offset by the known regulatory revenue
reduction. Household consumption remains high as many customers
continue to work from home and consumption from businesses has
started to return to pre-Covid levels as restrictions are lifted.
Overall, the net increase in revenue in the first half of the year
is expected to be around 4 per cent.
Underlying operating profit for the first half of 2021/22 is
expected to be higher than the first half of last year. This
largely reflects higher revenue and targeted efficiencies partly
offset by higher underlying operating costs, largely as a result of
inflationary increases in our core costs.
At the full year to March 2021, we simplified our approach to
alternative performance measures (APMs) such that we no longer, as
a matter of course, adjust our underlying earnings for
restructuring costs, net pension interest, capitalised borrowing
costs and routine prior years' tax matters.
We expect the underlying net finance expense for the first half
of 2021/22 to be around GBP25 million higher than the first half of
last year. Higher inflation applied to the group's index-linked
debt is expected to increase the underlying net finance expense for
the first half by around GBP55 million and is partly offset by a
GBP30 million reduction as a result of the change in APMs.
The introduction of capital allowances super deductions
announced in the Chancellor's Budget is expected to reduce the
group's current tax charge significantly in 2021/22 and result in
an underlying tax rate of around 5 per cent for the first half of
the year.
The legislation to increase the headline rate of corporation tax
to 25 per cent from 1 April 2023 was enacted in May 2021. As a
result, we expect to incur a deferred tax charge through the income
statement of around GBP380 million in the first half of 2021/22. To
provide a more representative view of business performance, this
deferred tax charge will be excluded from the underlying profit
measures.
We expect a small increase in group net debt at 30 September
2021 compared with the position as at 31 March 2021. This largely
reflects the group's ongoing investment in its asset base along
with acceleration of capital expenditure to deliver service
improvements sooner.
Our responsible approach to financial risk management continues
to deliver benefits, including a strong balance sheet, a stable
IFRS pension surplus and gearing within our target range supporting
a solid A3 credit rating for United Utilities Water with
Moody's.
United Utilities contacts:
Gaynor Kenyon, Corporate Affairs
Director +44 (0) 7753 622 282
Robert Lee, Head of Investor Relations +44 (0) 7500 087 704
Graeme Wilson, Tulchan Communications +44 (0) 2073 534 200
LEI 2138002IEYQAOC88ZJ59
Classification - Trading update
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