Coronavirus Update

United Utilities Group Plc - Final Results March 2021

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

United Utilities Group PLC

27 May 2021

FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2021

Performing strongly - Continued to deliver excellent operational performance through the COVID-19 pandemic

· Continuing to improve resilient and reliable services to more than 7 million people

· Leading the way on customer satisfaction; earning rewards against both C-MeX and D-MeX

· No serious pollution incidents and around one third reduction overall

· Lowest ever level of leakage and water supply interruptions more than halved

ESG at our heart - Responsible, long-term commitment to ESG

· On track for industry leading 4* environmental performance for 2020

· Exceeded targets to 2020 reducing emissions by 73%; delivering carbon pledges to net zero by 2030

· In the top 1% for Diversity and Inclusion Leadership out of 15,000 European businesses

· 4% reduction in typical household bills in 2020/21

· Helping 200,000 customers with affordability support

· Accelerating investment to support a green economic recovery

· Supporting 250 young people through the Government's Kickstart scheme

· £300m sustainable bond - 3 times oversubscribed and the lowest ever 8 year+ corporate sterling coupon

A digital utility - Investing in digital transformation for sustainable performance improvements

· Deploying breakthrough technology at pace and scale to deliver better service for customers

· Investing £300m above allowance in infrastructure and digital projects; fully remunerated1

· Innovative application of Systems Thinking driving efficiency and performance

· £21m net customer ODI reward for 2020/21; met or exceeded over 80% of performance commitments

· Targeting £20m net customer ODI rewards in 2021/22 and £150m in total for AMP7

Financial resilience - Robust financial performance and strong balance sheet

· Underlying2 profit after tax of £383m down 21%; in line with expectation

· Maintained resilient customer debtor position with only £12m aged over 1 year

· Strong balance sheet; A3 stable credit rating with Moody's

· Fully funded pension schemes driving relative value on a cash basis

· 4.3% return on regulated equity (RoRE) for 2020/21

· Total dividend of 43.24p, in line with AMP7 dividend policy

Key financials

 

Year ended

 

31 March 2021

31 March 2020

Revenue

£1,808.0m

£1,859.3m

Reported operating profit

£602.1m

£630.3m

Underlying operating profit2

£602.1m

£732.1m

Reported earnings per share (pence)

66.5p

15.7p

Underlying earnings per share2 (pence)

56.2p

71.3p

Total dividend per ordinary share (pence)

43.24p

42.60p

Net regulatory capital spend3

£616.5m

£579.4m

RCV gearing4,5

62%

61%

 

1 c£90m uplift to PR19 allowance, c£105m increasing RCV or AMP8 revenues through totex sharing mechanism and balance from expected customer ODI rewards. In addition, further potential tax benefits are expected from enhanced capital allowances.

2 Underlying measures are defined in the tables within the underlying profit section and reflect a change in approach to alternative performance measures (APMs) with prior year numbers re-presented for comparability

3 Net regulatory capital spend excludes infrastructure renewals expenditure, with prior year numbers re-presented for comparability

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

5 March 2021 gearing based on new definition of net debt to exclude the impact of derivatives that are not hedging specific debt instruments, with prior year numbers re-presented for comparability

Steve Mogford, Chief Executive Officer, said:

"Our key priority throughout the COVID-19 pandemic has been to protect our colleagues while ensuring that customers continue to receive high quality water and wastewater services. I am extremely proud of the hard work and dedication of my colleagues, not only in the way that we have supported the more than seven million people that we serve in the North West, but also in delivering our best ever operational performance. Our transformation to an innovative digital utility has helped deliver another year-on-year improvement against key targets that our stakeholders value most, such as leakage, pollution and customer service.

"The pandemic has been particularly challenging for our region, so we have responded by increasing the number of people eligible for extra financial support, with £15 million of new social tariff to help those most in need. At a time when purpose matters more than ever, it is right that we lead the way in the sector, by offering this level of support to people struggling to pay their bills.

"Protecting and improving the environment is one of our core responsibilities, including the quality of the water we return to our rivers and coastlines. We also have a duty to respond to climate change, which is why we've planted two million trees since 1995 and plan to plant another million by 2030. We've also spent £250 million to make our services more resilient to changes in weather patterns. We're delighted to be a signatory to the United Nation's Race to Zero campaign and to be targeting net zero by 2030. In support of this, we're delivering on our six carbon pledges, including a commitment to meet our science-based targets, to have a completely 'green' fleet of vehicles by 2028 and to restore 1,000 hectares of peatland by 2030.

"This great start to AMP7 provides a strong platform for us to deliver further good operational performance, play our full part in the economic recovery within the communities we serve and to continue to protect our natural environment".