United Utilities Group Plc (UU/), the U.K.’s largest publicly traded water company, said first-half profit rose 9 percent following an increase in regulated rates.
Pretax profit advanced to 135.6 million pounds ($217 million) in the six months ended Sept. 30 from 124.4 million pounds a year earlier, the Warrington, England-based company said today in a statement. That missed the 185.2 million-pound estimate of five analysts surveyed by Bloomberg.
“We are continuing to invest in our network for the benefit of our customers, the environment and the local economy,” Chief Executive Officer Steve Mogford said in the statement. “In the first half of this year, we have invested 354 million pounds and now expect to invest around 750 million pounds for the full year.”
Sales increased 4 percent to 822.9 million pounds from 792.7 million pounds a year earlier. The company said it will pay a dividend of 11.44 pence a share.
Ofwat, the water regulator, on Oct. 26 put forward proposals designed to boost competition in the industry and help it adapt to future pressures on water supply. The proposals could expose 40 percent of a company’s wholesale revenue to price reviews more often than the current five-year period. That could lead to prices not being linked to inflation or a company’s assets.
United Utilities is among water companies including Severn Trent Plc, Thames Water Utilities Ltd. and South West Water Ltd. that last week said they opposed the proposals.
“We’re unable to accept the flexibility that they have proposed in the license modifications because of the uncertainty that generates and also the potential for that uncertainty feeding into customer bills,” Mogford said today on a conference call with journalists.
The company has been the subject of bid speculation in press reports this year.
“As far as takeovers, we don’t comment on speculation,” the CEO said.
United Utilities rose 1.4 percent to 678 pence as of 9:05 a.m. in London.
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