United Utilities to discount bills as profits rise

United Utilities, the UK’s largest publicly traded water company, has pledged to discount customer bills in 2014-15 as it reported underlying operating profit up £29m to £343.2m for the six months ended 30 September 2013 (2012: £314.7m).

The water company’s pre-tax profit for the same period more than doubled year-on-year, from £139.4m to £335m, due to one-off costs associated with restructuring in 2012.

The company, which expects to invest at least £800m in 2013-14, said it would not enact the full price increase allowed in the final year of the current regulatory settlement.

Chief executive Steve Mogford said the rise in profits was down to “tight cost control”. The company also saw a £30 million rise in revenue, up from £822.9 million in the six months ended September 30 2012 to £853.3 million a year later.

Mogford said: “We are discounting prices next year so that customers do not pay the full allowed price increase, meaning that, on average, bills will go up by no more than inflation.  We are also committing to further support for customers struggling to pay.

“Our business plan for the next five-year period means that customers would benefit from below inflation average household bills for the decade to 2020.  We have sought the views of over 27,000 customers, as well as consulting with our regulators, to deliver a plan which we believe strikes the right balance for all our stakeholders.  This includes a substantial capital investment programme to meet our environmental obligations and deliver further customer and economic benefits.”

The company also said it met its leakage target for the seventh year in a row and hopes to meet its environmental performance target following an assessment from the Environment Agency.

Its Regulatory Capital Value (RVC) gearing fell by 1 per cent to 59% compared with last year last year.