United Utilities profit rises 10% in first half

United Utilities profit rose 10% in the first half as the water and waste management company increased revenue and cut costs.

Underlying operating profit for the six months to the end of September increased to £344m from £312.5m a year earlier. Revenue rose by £23m to £876m and total costs fell by £16m.

The company, which supplies and treats water in the North West of England, said performance was in line with its expectations.

Steve Mogford, United’s chief executive, said the group had benefited from a speeding up of investment that has improved service and efficiency.

Mogford said: "This has been a strong first half performance in which we have delivered further value for customers and shareholders. By investing earlier than our original plans for this regulatory period we are accelerating the delivery of value to customers and shareholders, and positioning the business as sector leading as we approach the next regulatory cycle.”

United said it would be difficult to meet regulatory assumptions for household retail costs because the regulator, Ofwat, had not allowed for inflation in the household retail business.

“The regulatory assumptions for household retail costs become progressively tougher as we move through the 2015-20 period. Our target is to minimise our costs compared with Ofwat's revenue allowance.”

Mogford said United was turning its attention to the next price review for the period from 2020 to 2025.

The company proposed an interim dividend of 13.24p a share, an increase of 2.2%.