United Utilities sees higher finance charges offset modest FY revenue growth

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