United Utilities ups dividend as first-half revenues top £1bn

FTSE 100-listed water company United Utilities saw revenues top the £1bn mark in its first half after a "robust" performance, though headline profits dropped due to a higher net finance expense.

However, that didn't stop the company from raising its interim dividend by 4.2% to 17.28p per share, in line with its payout policy.

Revenues rose to £1.08bn in the six months to 30 September, up 10.9% year-on-year, which the company said was mainly driven by the inflationary mechanism and the impact of prior-period adjustments in respect of consumption. During the period, UU had a £97m increase in the revenue cap due to regulatory adjustments.

Underlying operating profits were £336m, £65m higher than the year before, due to higher revenues.

However, the reported pre-tax profit was down 12.1% at £140.6m, with the reported net finance expense surging to £193m, £114m higher than last year. This was due to a £140m negative swing in net fair value gains on debt and derivatives, from a £100m fair value gain last year to a £40m fair value loss this year.

For the full year ending March 2025, UU is targeting a 10% increase in revenues, and said capital expenditure is expected to be in the range of £950m to £1.1bn.

"Improving rivers continues to be a key area of focus. We are already making progress at reducing spills from storm overflows, having commenced a programme of accelerated solutions," said chief executive Louise Beardmore.

"Our five-year plan builds on this, with a step-change in investment, and last week we announced that we would go further and faster, accelerating more work to reduce spills. By 2030, we will deliver improvements at more than 1,100 overflows across the North West."

The stock was up 0.7% at 1,056p by 0855 GMT.