Full year results for the Year Ended 31 March 2016


Continuing operations 

 Year ended

 31 March 2016

 31 March 2015




 Underlying operating profit1 



 Operating profit



 Total dividend per ordinary share (pence)



 RCV gearing2



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 17 of this document.
2 Regulatory capital value or RCV gearing calculated as group net debt/United Utilities Water’s RCV (outturn prices)
3 Time: Cost: Quality index (TCQi), which is an internal measure of the overall effectiveness of delivery of the capital investment programme

  • Strong operational and environmental performance
    • accelerated investment to deliver early operational benefit; £799m invested in 2015/16 and TCQi3 at 90%
    • £2.5m net reward achieved for 2015/16 on outcome delivery incentives
    • benefitting from ‘systems thinking’ operational approach and improved resilience of network
    • retained Dow Jones Sustainability Index ‘World Class’ rating and sector leading status
  • Further improvements in customer satisfaction
    • service incentive mechanism score improved compared with last year
    • customers continue to rate us very highly on wastewater services
  • Implementing efficiency plans to eliminate totex gap
    • business plan initiatives in place to meet totex allowance
    • good progress achieved in first year of the five-year regulatory period
  • ‘Water Plus’ Business Retail JV with Severn Trent approved by the CMA
    • first mover advantage and economies of scale, ahead of full market opening in 2017
  • Good financials
    • underlying operating profit down 9% at £604m, as expected
    • lower underlying net finance expense: benefit of lower cost fixed debt and lower RPI inflation
    • robust capital structure with RCV gearing at 61%, comfortably within our target range of 55% to 65%
    • final dividend of 25.64 pence per share (total for the year 38.45p), an increase of 2% in line with policy

Steve Mogford, Chief Executive Officer, said:

“We are encouraged to see further improvement in customer satisfaction, particularly in light of the unprecedented flooding events. We placed customers at the heart of our response and we benefitted from our recently opened integrated control centre and improved network resilience.

“We accelerated our investment programme to deliver early operational benefit and exceeded our expectations by achieving a small reward across our outcome delivery incentives, against a tough set of targets. In addition, we have now identified and are implementing a range of efficiency initiatives to meet our total expenditure allowance. We plan to invest over £100 million across the 2015-20 period in renewable energy projects.

“We received CMA approval for our joint venture with Severn Trent to merge our business retail operations, providing us with first mover advantage and economies of scale ahead of full market opening in 2017. The joint venture, named Water Plus, combines the complementary skills of both companies to deliver a fresh, competitive operation providing a very attractive retail proposition for business customers. 

“Our progress over this first year of the new regulatory period shows we are well placed to deliver further value for customers, shareholders and the environment, underpinned by a robust capital structure and good credit ratings.”

The full announcement can be viewed here.

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 / Martin Pengelley – Tulchan Communications +44 (0) 20 7353 4200

A presentation to investors and analysts starts at 9.00am on Thursday 26 May 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 0025, access code 958722.  A recording of the call will be available for seven days following Thursday 26 May 2016 on   +44 (0) 20 7031 4064, access code 958722.



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