In addition, the company said its service incentive mechanism (SIM) scores for 2013/14 were above the industry average, representing “continued year-on-year improvement”.
“The group expects to deliver a good underlying financial performance for 2014/15. Our improved operational and capital delivery performance will provide further customer and environmental benefits,” UU said in the IMS, ahead of its annual general meeting to be held later today.
Current trading is in line with the group’s expectations, with increased revenue due to the regulated price rise largely offset by the £20 million customer discount as well as higher depreciation and other operating costs, in line with management expectations.
Analysts at RBC Capital said they viewed UU’s statement as “neutral with hints of positivity”.
“Of note, the company is ahead of schedule on its regulatory outperformance, achieved an above-average overall SIM score for FY14, and has also highlighted that it has financing headroom as it moves into 2016,” an investor note said.
“Whilst good, we believe this will unlikely result in significant share price movement as all eyes are on Ofwat’s upcoming publication of UU’s draft determination on 29 August,” RBC Capital added.
Ofwat is expected to publish draft determinations on 29 August 2014 and final determinations on 12 December 2014.