United Utilities Group (UU) H1 24/25 earnings summary

Executive summary

• Delivered strong operational and financial performance in H1 2024/25, with record ODI rewards, a 4-star EPA rating, and sector-leading Ofwat measures.

• Achieved significant improvements in water quality, customer service, and pollution reduction, including zero serious pollutions in HY25.

• Supported over 475,000 customers with affordability schemes and maintained high employee engagement.

• Constructive engagement with Ofwat and other regulators, with detailed representations and adaptive planning.

• The government’s review of the water sector is welcomed, with recommendations expected by June, aiming for a more effective regulatory architecture.

Financial highlights

• Revenue rose 10.9% year-over-year to £1,082m; underlying operating profit up 23.8% to £336m.

• Underlying EPS increased 103% to 26.8p; interim dividend up 4.2% to 17.28p.

• Underlying profit after tax doubled to £183m; underlying net finance expense fell 14.6% to £153m.

• RCV gearing stable at 60%; adjusted net debt at £8,978m; liquidity of £2.6bn extends into FY27.

• Pension scheme fully funded; IAS 19 net pension surplus increased to £284m.

Outlook and guidance

• FY25 revenue expected to increase by ~10%, driven by inflation and prior period adjustments.

• Underlying operating costs to rise above inflation due to business rates, regulatory charges, and IRE.

• Depreciation to increase by £30–40m; capex forecasted at £950m–£1,100m.

• FY25 dividend forecast at 51.87p, in line with CPIH growth policy.

• A market update is planned for early 2025, after review of the Final Determination.