Coronavirus Update

United Utilities Group Plc - Final Results

This content has been sourced from: https://www.investegate.co.uk/united-utilities-grp...

United Utilities Group PLC

22 May 2020

FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2020

Key financials

 

 

Year ended

31 March 2020

31 March 2019

Revenue

£1,859.3m

£1,818.5m

Reported operating profit

£630.3m

£634.9m

Underlying operating profit1

£743.9m

£684.8m

Reported profit after tax

£106.8m

£363.4m

Underlying profit after tax1,2

£429.6m

£407.9m

Total dividend per ordinary share (pence)

42.60p

41.28p

Net regulatory capital spend

£722.4m

£821.0m

RCV gearing4

62%

61%

Supporting customers and protecting our colleagues through the COVID-19 outbreak

  • Relentless focus on delivering reliable water and waste services during the pandemic
  • Financial support schemes helping 120,000 customers; £3.5m made available immediately
  • Increasing the number of customers eligible for social tariff support
  • Robust business continuity plans to protect employees - 60% working from home
  • No employees furloughed; 80% designated as key workers

Strong financial position to manage the impact of COVID-19

  • Reported profit after tax of £107m impacted by adjusted items of £323m1
  • Underlying1,2profit after tax of £430m up 5% on prior year
  • £56m of costs associated with COVID-19 treated as adjusted items1
  • Around £1.2bn of available liquidity3
  • RCV gearing4of 62% supports A3 stable credit rating with Moody's
  • Underlying results for 2019/20 and robust liquidity, support paying final dividend in line with AMP6 policy

AMP6 operational transformation has improved customer service and delivered shareholder value

  • Unique Systems Thinking approach is a competitive advantage - and delivers better service for customers
  • Upper quartile customer satisfaction performance achieving SIM outperformance in AMP6
  • Operational excellence has delivered net wholesale ODI outperformance of £44m
  • Totex outperformance of around £100m delivered against our AMP6 scope
  • Well prepared for AMP7 - £100m of £350m outperformance reinvestment to achieve a flying start

Long-term commitment to ESG benefiting our stakeholders

  • 10% real reduction in average household bills since 2010, further 7% reduction in 2020/21
  • £71m AMP7 voluntary funding to provide financial assistance to customers struggling to pay their bills
  • Six pledgesto mitigate climate change
  • Rated World Class on Dow Jones Sustainability Index for 13 consecutive years

Underlying profit measures are defined in the underlying profit measures tables

Approach used to derive underlying profit after tax has been changed to exclude the impact of deferred tax to better reflect the regulatory revenue allowances, with prior year numbers restated for comparability

Covering £0.7bn of debt that falls due for repayment across the next 12 months

Regulatory capital value (RCV) gearing calculated as group net debt/United Utilities Water's shadow RCV (outturn prices)

Further detail on six climate change mitigation pledges included in operational performance section

Steve Mogford, Chief Executive Officer, said:

"The COVID-19 pandemic is an unprecedented challenge for our country. At United Utilities, we have focused relentlessly on supporting customers and colleagues through these difficult times. We offer the sector's widest range of assistance schemes to help those struggling to pay their bills and have increased the number of customers eligible for reduced tariffs. We have also made £3.5 million available immediately to those most in need, with £71 million committed to help customers over the next five years.

"None of this would be possible without the incredible team at United Utilities. I want to pay tribute to the hard work and dedication of my colleagues through this challenging period, including the many key workers who have continued to carry out essential repairs and maintenance in our communities. We will focus on the safety of our people and support for our customers over any short term impact on our financial and operational targets.

"We can reflect on our performance improvements across the last five year price review period with pride. We have shared £350 million of our outperformance through additional investment, providing better service to customers and enhancing the environment. We have committed company funding to supporting customers in financial difficulty and to our pension schemes, achieving low dependency and mitigating risk for employees past and present, and we have delivered financial performance that supports the payment of the final dividend in August 2020, in line with our AMP6 commitment.

"The economic implications of COVID-19 will provide a challenging backdrop to the AMP7 regulatory period. United Utilities will continue to prioritise the implementation of its delivery plans, albeit reviewing and adapting these plans as necessary, and we fully intend to play our part in the recovery of the North West economy. It is, however, too early to predict the full impact of COVID-19 on inflation, the economy more generally and on our business, and we will review our dividend policy for AMP7 as a clearer picture of the post COVID-19 economic environment emerges."