The water company has reported that revenue for this financial year is expected to be “slightly higher” than last year reflecting the regulated price allowance for 2014/15.
Coupled with this, there is due to be a “modest increase” in underlying operational profit as the board “continues to tightly manage our cost base” despite an increase in depreciation and other cost pressures, including bad debts.
There has also been a slight fall in infrastructure renewals expenditure as the company makes the transition from AMP5 to AMP6, although this still stands at £850 million for 2014/15.
The underlying net finance expense for the company is set to be “markedly lower” for this financial year because of the low RPI inflation on UU’s index-linked debt.
Despite this, there will be a “modest increase” in group net debt at the end of the financial year, with this set to reflect regulatory capital expenditure, the payment of the 2014/15 interim dividend and payments in relation to interest and tax.
This is said to be in line with the group’s expectations for the year ending 31 March 2015.
The company also added that customer service remains a “primary area of focus” and that it continues to make progress reflected in a fall of customer complaints.
Whitman Howard utilities analyst Angelos Anastasiou said UU “now looks set to exceed over the full period” and is “relatively well placed” heading into the next AMP cycle.
United Utilities will announce its full year results on 21 May 2015.