United Utilities Group (UU) H2 24/25 (Q&A) earnings summary

Executive summary

• Achieved top quartile operational and financial performance, with consistent delivery across key metrics and strong positioning for AMP8.

• Guidance set for at least 100 basis points outperformance over the base allowed return, primarily driven by financing outperformance, with additional contributions from ODIs, PCDs, and TOTEX efficiencies over the AMP period.

• EPS grew by approximately 50% year-over-year, reflecting robust profitability and operational efficiency.

• Maintained a strong balance sheet with gearing at the midpoint of the range and full equity funding entering AMP8.

• Delivered 13 consecutive years of 'Green' status for serious pollutions and significant reductions in environmental incidents.

Financial highlights

• Revenue increased 10% year-over-year to £2,145m; underlying operating profit up 22% to £634m.

• Underlying EPS rose 49% to 49.6p; dividend per share up 4% to 51.85p.

• Capital investment reached £1,083m, up 47% from the prior year.

• RCV gearing at 60%, with liquidity of £2.8bn extending to 2027.

• Underlying profit after tax increased 49% to £338m; underlying net finance expense decreased to £284m.

Outlook and guidance

• Outperformance guidance is based on Ofwat's 55% leverage assumption, with a high degree of confidence in achieving at least 100 basis points.

• Revenue expected to rise to £2.5–2.6bn in FY26, with higher depreciation and finance costs due to asset base growth.

• Capital investment for AMP8 projected at approximately £9bn, with 7% CAGR asset base growth.

• FY26 dividend forecast at 53.66p, in line with CPIH growth policy.

• Inflation assumptions use a 2% CPI long-term forecast, with short-term adjustments based on bank technical forecasts.