United Utilities feels the pressure in the recession
UNITED UTILITIES, the biggest water company in the UK, yesterday said its profit had risen by one per cent to £370m, but that it had been hit by tumbling demand from businesses and homes in the downturn.
Turnover rose 0.5 per cent to £1.2bn in the six months to 30 September, and the group proposed an interim dividend up five per cent to 11.17p per share.
Rivals Severn Trent and Northumbrian said earlier this week they had been hit by the downturn too, as companies scrimp on water usage.
The report comes ahead of water regulator Ofwat’s announcement today on how much companies can charge their customers over the next five years.
The announcement could kick off a spate of mergers and acquisitions in the industry, Ernst & Young said, as companies seek to meet efficiency targets.
“UU’s statement hints that the group is unlikely to respond to Ofwat’s proposals until January, which means dividend policy won’t be announced before next year either,” Thuy Quynh Dang at Barclays Wealth said yesterday.