United Utilities makes solid start

Utility company United Utilities remains confident of delivering its 2010-15 regulatory out-performance targets after a solid start to the current financial year.

Revenue in the year to the end of March 2013 should be higher than last year, but, as expected, the increase is slightly below the allowed regulated price rise, principally reflecting the ongoing impact of customers switching to meters and continued lower commercial volumes.

The increase in revenue for the full year is, as previously flagged, anticipated to be largely balanced by higher depreciation, alongside higher infrastructure renewals expenditure and other operating costs both of which are impacted by the transfer of private sewers.

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Group borrowings, net of cash and short term deposits and derivatives, at the half year (end of September) are expected to be moderately higher than the position at 31st March 2012.

Gearing remains in the middle of industry regulator Ofwat's assumed range (55% to 65% net debt to regulatory capital value), reflecting growth in the regulatory capital value through continued high levels of capital investment coupled with retail price inflation.

JH