Warrington-based United Utilities, the UK’s largest listed water company, said on Wednesday it expects its first-half revenue to be higher than the first half of last year, largely reflecting “allowed regulatory revenue changes.”

Underlying operating profit for the first half of 2019-20 is expected to be higher than the first half of 2018-19, “largely reflecting the higher revenue and lower infrastructure renewals expenditure (IRE),” said the firm in a trading update.

United Utilities also said it expects group net debt to increase by around £250 million at September 30, 2019, compared with the position as at March 31 2019, when net debt including derivatives was £7.067 billion, up from £6.868 billion last year. 

“This largely reflects the prepayment of around £100 million in April 2019 of the agreed deficit recovery contributions in relation to the group’s defined benefit pension schemes, the impact of IFRS16 which results in the recognition of a £55 million lease liability included in net debt, and the group’s ongoing investment in its asset base,” said United Utilities.

“Our responsible approach to financial risk management continues to deliver benefits including a strong balance sheet, pension schemes that are now fully funded on a self-sufficiency basis and gearing comfortably within our target range of 55 per cent to 65 per cent net debt to RCV, supporting a solid A3 credit rating for United Utilities Water with Moody’s.”

In May, United Utilities said its revenue rose £83 million to £1.8 billion and underlying profit before tax rose £90 million to £460 million in the year ended March 31, 2019.

The firm supplies water to around three million homes and 200,000 businesses in the north-west of England.