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United Utilities Profit Climbs 8.7% on Higher U.K. Water Prices

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May 23 (Bloomberg) -- United Utilities Plc, the U.K.’s largest publicly traded water company, said fiscal full-year profit rose 8.7 percent as higher prices helped counter lower volumes and a shift by customers to meters from fixed rates.

Pretax profit climbed to 304.7 million pounds ($458 million) in the year through March from 280.4 million pounds a year earlier, the Warrington, England-based company said today in a statement. Sales advanced 5 percent to 1.64 billion pounds. The company will pay a dividend of 34.32 pence a share.

The results reflect an increase in regulated prices, which are determined by industry regulator Ofwat every five years based on a formula linked to inflation. The higher rates helped offset a switch by more customers to water meters, which tend to cut household consumption and reduce bills.

United Utilities invested 787 million pounds in its network in the 12-month period, taking its total investment since 2010 to more than 2 billion pounds. The company plans to invest 800 million pounds in the current fiscal year to meet regulatory targets that require it to spend more than 3 billion pounds through 2015 on its facilities and network.

“We are improving the quality and reliability of our infrastructure and, across the 2010-15 period, expect to reinvest around 200 million pounds of capital expenditure outperformance for the benefit of our customers and the environment,” Steve Mogford, chief executive officer, said in the statement.

United Utilities dropped 0.6 percent to 777 pence in London as of 8:02 a.m. local time.

To contact the reporter on this story: Louise Downing in London at ldowning4@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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