United Utilities has said it expects to spend an additional £80 million in the current financial year to continue to safeguard water supplies following the prolonged dry spell this summer.
The extra investment comprises £40 million of operating costs and infrastructure renewals expenditure and £40 million of capital expenditure.
In a trading update published today (28 September), the water company said the prolonged period of extreme hot and dry weather had resulted in exceptional demand from customers.
The additional investment made by the company, along with cooler and wetter weather in August, avoided the need for any water restrictions.
United Utilities had intended to introduce a hosepipe ban but called it off in early August before it was due to come into effect.
The company was also granted permission to take additional water from the Lake District to protect public water supplies as a precaution.
In its update, United Utilities said current trading is “in line with expectations” for the six months to 30 September 2018.
It expects operating costs associated with the exceptional dry weather period to be an adjusted item and, therefore, underlying operating profit for the first half of 2018/19 is expected to be higher than the first half of the previous year.
Group revenue is expected to be higher than the first half of the year, reflecting the company’s allowed regulatory revenue changes.
On 24 September, Pennon released its trading statement, which said it is on track to meet management expectations for 2018/19.
The company also highlighted that it had not needed to put in place any water restrictions for the 22nd consecutive year, despite high demand and dry weather.
United Utilities will publish its interim results on 21 November and Pennon will announce its half-year financial performance on 27 November 2018.