UK's biggest water company buoyed by return to offices

·2 min read
Young caucasian woman hand holding a glass with pure drinking water pouring from home faucet close up.
Payment collection from customers have been stronger than anticipated, and are higher than the collection rate at the same point in 2020. Photo: Getty

Water supplier United Utilities (UU.L) posted a positive set of half-year results on Wednesday in London, with operating profit rising 4% to hit £333m ($445m) off the back of an increase in business usage as lockdowns eased, and people began to head back to offices.

This principally reflects the £38m increase in revenue partly offset by inflationary increases on its core costs, along with other smaller cost increases, the company said. 

Alongside the rise in profit, the supplier said it had implemented a 6% reduction in household bills as a cost-of-living crunch closes in on the UK. 

In terms of collecting payments from customers in the half, it said levels have been stronger than anticipated, and are higher than collection rate at the same point in 2020..

United Utilities noted that the economic situation remains uncertain at the interim reporting date. 

This is particularly the case as government support schemes such as furlough unwind, which could result in increased unemployment, and further impact the ability of some customers to pay. 

The company said a range of collection scenarios have been considered taking account of the current year's cash collection rates, as well as collection of prior year and legacy debt. 

It also said it was set to receive £150m in regulatory incentives for 2020-2025.

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As questions persist about water pollution and sewage treatment, with an investigation launched by the UK's water regulator Ofwat, United Utilities said it had no serious pollution incidents in its network. 

"We take our environmental responsibilities very seriously and are highly transparent about our performance as evidenced by our high levels of self-reporting on pollution," the company said. 

It is mitigating the threat of inflation through hedging, constructive cost challenge and commercial negotiations.

Stock gained 0.5% in early trade on Wednesday following the results.

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