United Utilities accepts Ofwat final determination, will invest £13bn
By Josh White
Date: Wednesday 29 Jan 2025
(Sharecast News) - United Utilities said on Tuesday that it has accepted the UK water regulator's final determination for the next regulatory period, committing to a £13bn investment programme over the five years to March 2030.
The FTSE 100 water company said it would be the largest investment in water and wastewater infrastructure in over a century, supporting 30,000 jobs and contributing £35bn in economic value to the North West.
It said the investment plan included £5.7bn in enhancement expenditure, with a £2.4bn programme targeting a 60% reduction in storm overflow spills this decade.
United Utilities said it expected annual asset base growth of around 7%, bringing its closing regulatory capital value for the period to over £21bn.
The company said it was also implementing a £525m affordability package aimed at assisting one in six households with their water bills by 2030.
United Utilities said it remained in a strong financial position, with gearing at 60% and £2.6bn in available liquidity extending to 2027.
The board said it planned to maintain gearing within a 55% to 65% range while preserving the company's long-term credit ratings, assuming no changes to sector risk assessments or ratings methodologies.
It also reaffirmed its commitment to growing its dividend in line with CPIH inflation under its existing policy.
Looking at its third quarter, United Utilities said it had delivered a strong operating performance and remained on track to meet its full-year financial guidance.
It said it expected to achieve net outcome delivery incentive (ODI) rewards above last year's £34.5m.
The company also announced the selection of a preferred bidder for the replacement of six tunnel sections in the Haweswater Aqueduct Resilience Programme.
It said the aqueduct, which supplies water to 2.5 million people in Cumbria, Lancashire, and Greater Manchester, was undergoing one of the largest water infrastructure projects in the region, with an estimated construction cost of £2.5bn to £2.9bn.
At 0846 GMT, shares in United Utilities were down 0.98% at 971.6p.
Reporting by Josh White for Sharecast.com.
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