United Utilities sees higher finance charges offset modest FY revenue growth

Water supply company United Utilities has reported an 8.3p loss per share for the year ended 31 March, down from earnings of 66.5p per share a year earlier, as higher finance charges offset modestly improved annual revenues.

United Utilities said full-year revenues had risen from £1.80bn to £1.86bn, while reported and underlying operating profits grew 1.3% to £610.0m.

Underlying pre-tax profits came to £301.9m, £158.0m lower than in the prior year, as a £7.9m increase in underlying operating profits and a £7.5m decrease in the share of losses of joint ventures was more than offset by a £174.0m increase in underlying net finance expenses. Reported pre-tax profits fell by £111.0m to £439.9m.

The FTSE 100-listed firm declared a total dividend per ordinary share of 43.5p, slightly higher than the 43.24p FY dividend declared at the same time a year earlier.

United noted that household bad debt had returned to 1.8% of regulated revenue, lower than the 2.2% a year earlier and consistent with levels achieved by the group prior to the Covid-19 pandemic.

The group also added that although inflation had increased operating costs and net finance expense in the trading year, it had also led to a higher level of financing outperformance and, together with a £765.0m additional investment announced beyond the scope of its final determination, was projected to lead to higher regulatory capital value growth over the 2020-25 period.

As of 0825 BST, United Utilities shares were down 5.89% at 1,047.0p.

Reporting by Iain Gilbert at Sharecast.com