United Utilities: profit rises to £518m, dividends £320m

Louise Beardmore

Warrington-based water giant United Utilities said its revenue revenue rose by £145 million or 8.1% to £1.95 billion in the year to March 31, 2024, “largely reflecting the inflation increase allowed as part of our revenue cap.”

Underlying operating profit rose £77 million to £518 million.

Dividend will rise 9.4% to 49.78p per share. The group said total dividends paid were £320 million.

Net debt at March 31, 2024, was £8.7 billion, up from £8.2 billion.

The firm said it re-entered the Euro bond market, pricing a €650 million 10.25 year green bond that was 3.8x oversubscribed.

On its “customer outcome delivery incentives” United Utilities said: “Our overall performance was strong this year, meeting or exceeding 80 per cent of our performance commitments.

“However, exceptionally high rainfall during the year adversely impacted performance such as flooding and we expect to receive penalties against these commitments for FY24.”

United Utilities CEO Louise Beardmore said: We take our role in protecting the environment very seriously; our ambitious business plan would see us investing more than ever before to improve services across the five counties of the North West.

“This would deliver a genuine step-change in infrastructure for the benefit of customers and the environment, and support 30,000 jobs.

Our finances are robust with one of the lowest levels of gearing in the sector.

“We are readying our supply chain, and bringing forward around £400 million of AMP8 investment to reduce spills at more than 150 storm overflows, and to accelerate environmental schemes in communities such as Windermere, where we are fast-tracking investment to drive improvements earlier.

“This is on top of the river health improvements we are already delivering through our Better Rivers programme and accelerated environmental improvements funded through reinvestment of our AMP7 outperformance.”


Aarin Chiekrie, equity analyst, Hargreaves Lansdown:  “Despite some of its infrastructure desperately needing upgrades, United Utilities showed no leaks in its profit pipeline last year.

“The UK water sector continues to find itself in the spotlight, and there’s significant work to do in restoring public confidence and trust.

“But United Utilities looks like it’s ready for the fight, bringing forward £400mn of investment to the current year to help reduce its use of storm overflows at a faster pace.

“Outcome Delivery Incentives (ODIs) came in at £34mn last year, which, despite being a record reward, is roughly £30mn lower than the group’s original expectations. ODI’s are bonuses for delivering above and beyond committed levels of service to customers.

“The shortfall stems from the negative impact of exceptionally high levels of rainfall last year – the wettest year in the North West for the last 69 years.

“This put pressure on the group’s capacity to manage it all properly, ultimately leading to burst pipes and unwanted spills from storm overflows.

“Despite the lower ODIs, full-year profits jumped higher at double-digit rates, in line with market expectations.

“This growth was largely driven by inflation-linked increases in revenue. Alongside strong cash generation, the group’s debt levels remain within the lower half of its target range, which supports its ambitious £13.7bn plans to expand and upgrade its assets between 2025-2030.”