25th November 2015
As United Utilities publishes its half-year results, Ian Forrest, investment analyst at The Share Centre, explains what they mean for investors…
United Utilities has reported first half underlying operating profits of £308.6m, which represents a 10% fall from last year and was below analysts’ forecasts of £312m. Operating profits were additionally impacted by new regulated price controls, an increase in depreciation and other costs.
The company announced in September that it would take a £30m hit from compensation payments following a water quality issue in parts of Lancashire over the summer.
However, investors should acknowledge that United Utilities believes it can further improve its operations over the next five years. It aims to provide the best service to customers at the lowest sustainable cost and in a responsible manner.
Subsequently, we maintain our ’buy’ recommendation on United Utilities for income investors as it continues to target delivering dividend growth of at least RPI inflation each year through to 2020.