While reported profit after tax rose from £158.6 million to £162 million, the company’s reported operating profit fell 16.84% to £318.5 million, while its underlying profit after tax dropped 16.02%, from £207.2 million to £174.0 million.
These profit figures were led by a 4.59% decrease in the company’s revenues, down from £935.5 million, to £894.4 million, and an increase in its net regulatory capital spend, up from £255 million to £276.4 million.
It wasn’t all doom and gloom, though. United Utilities enjoyed a 1.47% dividend increase, up to 14.41p. Similarly, the company helped 142,000 customers through support schemes during the period, and reduced users’ average household bills by 7% for the 2020/21 year.
Speaking on the results, United Utilities CEO, Steve Mogford, commented: “Despite the pandemic, our operational performance in this first year of the new regulatory period is on track. We are accelerating our capital expenditure to bring forward benefits and help support 17,700 jobs in the supply chain. We recognise the role that we can play in a successful society, economy and a thriving natural environment and are confident in our ability to deliver our AMP7 plans to achieve this.”
“We now have a clearer understanding of the impact of COVID-19 on our business which remains robust and supported by a strong balance sheet. This, together with a stabilised inflation outlook supported by central bank policy and government actions, gives us the confidence to reaffirm our responsible AMP7 dividend policy of growth in line with CPIH inflation.”
Following the announcement, United Utilities shares rallied by 3.33%, to 926.00p a share. This price is short of its post-pandemic high of 978p seen in June, and analysts’ consensus target price of 1,005p a share. Analysts have a consensus ‘Buy’ rating on the stock; it has a p/e ratio of 57.45; and the Marketbeat community has a 54.34% “underperform” stance on the company.