United Utilities has continued to perform strongly with revenue expected to be up year-on-year as it confidently moves into the next five-year period.
The company reported underlying profit higher for the six months to 30 September 2019 than the previous year. It said this reflects higher revenue and lower infrastructure renewal expenditure in the period.
The company committed to spending £350 million to improve performance in the coming period as the performance has been “in line with the group’s expectations”.
Ahead of its half-year trading update the company said it is delivering enhanced levels of service and resilience for customers thanks to its strategy of accelerating investment in the early years of the previous five-year period.
It has seen strong performance with what it described as sustainable improvements in efficiency.
The company said: “Our strong performance means that we are well placed to deliver against our targets for the current regulatory period with no material change to prior guidance on our overall level of regulatory outperformance.”
The company said it expects to see an increase in group net debt by around £250 million by the end of this month.
UU said this reflects prepayment in April of £100 million related to pension schemes.
UU will invest the additional £350 million to improve its performance earlier in the next five-year period, it said it is progressing well with the programme of spend.
Earlier this year the company awarded three five-year contracts worth £17 million per year to Sapphire Utility Solutions as part of the next five-year period.
As one of only three companies awarded fast-track status by Ofwat for its PR19 draft determinations, the company said it had confidence heading into the next regulatory period.
The company’s previous year’s operating profit had been affected by the dry summer of 2018 and it was impacted by costs relating to the weather.