Half Year Results For The Six Months Ended 30 September 2016

Strong performance and on track to meet our targets

Highlights

  • Further improvements in customer satisfaction: our best AMP6 score on Ofwat’s service incentive mechanism 
  • Effective acceleration of capital investment continues: £383m invested in first half, c£800m planned for full year
  • On track to meet our 2015-20 totex and outcome delivery incentives (ODI) targets
  • Innovation and new technology through Systems Thinking approach driving further operational improvements
  • Attained industry leading company status as measured by the Environment Agency
  • Operating profit slightly ahead of last year
  • Good financial performance, robust capital structure and effective pensions hedging
  • Interim dividend of 12.95 pence per share, an increase of 1.1% in line with policy

Key financials

  Six months ended
  30 September 2016 30 September 2015 
Revenue  £853.0m £857.0m
Underlying operating profit1 £312.5m  £308.6m
Operating profit  £303.6m  £278.3m
Interim dividend per ordinary share (pence)  12.95p  12.81p
RCV gearing2 62%  59%

1 Underlying profit measures have been provided to give a more representative view of business performance and are defined in the underlying profit measure tables on page 14
2 Regulatory capital value or RCV gearing calculated as group net debt/UUW’s shadow RCV (outturn prices)

Steve Mogford, Chief Executive Officer, said:

“This has been a strong first half performance in which we made significant progress towards meeting our customer, environmental and financial targets. 

“Customer service has again improved, resulting in our best score under Ofwat’s revised service incentive mechanism.  We’re continuing to enhance our customer service offering and recently launched Priority Services, to provide dedicated support for those who are experiencing short or long-term personal or financial challenges.

“The acceleration of our capital investment programme continues to deliver early customer service and operational benefits. We have invested £383 million in the first half of this year and remain on track to invest around £800 million for the full year. Our Systems Thinking approach to running the business continues to drive innovation into our operations and we are rolling out further capability this year, including new process technology. 

“Our environmental performance has remained consistently high and we were delighted to attain industry leading company status from the Environment Agency.

“Overall, we are encouraged by our progress in the early part of this regulatory period. We have a robust financial position and are confident that we can deliver our targets for both customers and shareholders.” 

For further information on the day, please contact:

Gaynor Kenyon – Corporate Affairs Director - +44 (0) 7753 622282
Darren Jameson – Head of Investor Relations - +44 (0) 7733 127707
Peter Hewer – Tulchan Communications -+44 (0) 20 7353 4200

A presentation to investors and analysts starts at 9.00am on Wednesday 23 November 2016, at the Auditorium, Deutsche Bank, Winchester House, 1 Great Winchester Street, London, EC2N 2DB.  The presentation can be accessed via a live listen in conference call facility by dialling: +44 (0) 20 7162 0125, access code 960611. A recording of the call will be available for seven days following Wednesday 23 November 2016 on +44 (0) 20 7031 4064, access code 960611.

The associated presentation will be available at 9am on the day here.

The Half Year Results For The Six Months Ended 30 September 2016 full document can be downloaded here

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