United Utilities revenue growth below price rise

United Utilities has said that it is on track to deliver a 'good' underlying financial performance for the year ended March 31st, and is on course to meet its regulatory outperformance targets.

However, the water, waste-water and telecoms firm said that full-year revenues are expected to be 3-4% higher, slightly below allowed price rise by regulators. This reflects the "ongoing impact of customers switching to meters and lower commercial volumes in the second half of the year," the company said.

While the group said that operating profit is expected to be lower in the second half, compared to the first (as indicated previously), due to higher infrastructure renewals expenditure and regulatory capital expenditure, it notes that it received a one-off cash tax inflow of £35m in relation to the previous year's tax matters.

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This is in addition to the £50m deferred tax credit recognised in the first half due to the reduction in the rate of corporate tax.

Furthermore, with the government announcing yesterday in its Budget that the rate of corporation tax would reduce further to 24%, the company expects to recognise an additional tax credit of £50m in the second half.

"The company is encouraged by its recent progress and will continue with its strong operational and customer focus, with the aim of delivering further service improvements for customers combined with greater efficiency," the statement said.

BC