Last checked at 27 Jul 2007 07:00
UNITED UTILITIES PLC 2007 ANNUAL GENERAL MEETING AND INTERIM MANAGEMENT STATEMENT
United Utilities issues a trading update ahead of its Annual General Meeting, to be held today at the Bridgewater Hall, Manchester. Commenting on the group's performance for the year ended 31 March 2007, Chairman, Sir Richard Evans will say:
"The group made excellent progress in the last financial year. We delivered good profit growth and operational improvements, as we benefit from our strategy of focusing on our core skills.
"Consistent with our current policy of growing dividends in line with inflation, the Board is proposing to increase the final dividend by 2.4 per cent."
The Chairman will introduce Paul Capell to the meeting who was appointed to the Board as Business Development Director on 1 May 2007 and Dr Catherine Bell who was appointed as a non-executive director on 19 March 2007. He will add that Sir Peter Middleton will step down at the conclusion of the AGM as Deputy Chairman and Senior Independent Director after 13 years as a non-executive director. Nick Salmon, already a non-executive director, will replace Sir Peter as Senior Independent Director.
United Utilities now has a clear strategy of focusing on its core skills of managing water, wastewater, electricity and gas networks and aims to be a world class operator of utility infrastructure. Consistent with this strategy, the group sold Vertex in March 2007 for around ‚£218 million and its residual stake in THUS Group plc ("THUS") in June 2007 for approximately ‚£76 million.
At the group's preliminary results on 5 June 2007, the Board announced that it had taken the decision to initiate a sale process for the company's electricity distribution assets with a view to maximising shareholder value. It is the company's intention to continue operating the electricity assets. The sale process is progressing in line with management's expectations.
On completion of the proposed sale, the Board intends to return to shareholders the net equity proceeds. It will then review the capital structure and dividend policy so that they will be appropriate for the revised composition of the group, recognising the importance of income to shareholders.
The group has continued to raise long-term, index-linked funding and now has over ‚£1.5 billion of this funding in place at favourable interest rates averaging around 1.8 per cent real. Around one third of this funding has a maturity of 50 years. This index-linked funding secures substantial additional value for shareholders.
Following the announcement made on 30 May 2007, United Utilities has now delisted from the New York Stock Exchange and filed for deregistration under the US Securities Exchange Act of 1934. United Utilities' American Depositary Shares are now trading on an over-the-counter basis.
Current trading and outlook
Current trading is in line with the group's expectations. The regulated businesses will benefit this financial year from allowed price increases, including inflation, of 8.3 per cent in the water business and 3.7 per cent in the electricity business. United Utilities' balance sheet remains robust and its asset base continues to grow in line with management's expectations as the company progresses its substantial capital investment programmes. The proceeds from the Vertex and THUS sale transactions have served to lower net debt.
The group's focus on its core skills has helped deliver operational and service improvements for customers. In 2006/07, United Utilities Water met the economic level of leakage rolling target, as set by the regulator, for the first time in five years. Improvements were also delivered in the areas of relative efficiency, pollution, sewer flooding, and customer satisfaction and United Utilities Electricity again met its regulatory targets for customer minutes lost and customer interruptions. Good progress has been made to date and there is plenty of scope to achieve more.
United Utilities is the leading utility infrastructure outsourcing company in the UK with a comprehensive portfolio of contracts. Operational performance is in line with the group's expectations. The order book remains strong and the company continues to pursue further opportunities to leverage its core skills.
The group's business improvement initiatives are progressing well and it remains on course to deliver its regulatory efficiency targets. With predictable index-linked revenue streams ahead, management is confident of delivering profits in line with the group's expectations for the year.
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United Utilities' Contacts
For further information please contact:
Philip Green, Chief Executive +44 (0) 1925 237000 Tim Weller, Chief Financial Officer +44 (0) 1925 237000 Gaynor Kenyon, Communications Director +44 (0) 7753 622282 Darren Jameson, Investor Relations Manager +44 (0) 7733 127707
Dominic Fry / Peter Hewer, Tulchan Communications +44 (0) 20 7353 4200
UNITED UTILITIES PLC