United Utilities Group (UU) H2 25/26 & Strategy update earnings summary

Executive summary

• Preliminary FY 2026 results released ahead of schedule, showing strong operational and financial performance, with 7.5% asset growth to £16.5bn and a 42% increase in underlying EPS to 107.1p year-over-year.

• Launched a GBP 800 million (£800m) equity placement, including £400m cornerstone investment, to fund incremental AMP8 CapEx and support over 4,000 new jobs.

• Upgraded AMP8 capital expenditure guidance to GBP 11.5 billion, supporting regional growth, infrastructure resilience, and delivery momentum.

• Regulatory returns guidance raised to 10%-11% for AMP8, up 100 basis points, with outperformance of at least 200bps.

• Improved operational and environmental metrics, including significant reductions in sewer flooding, pollution, and spill activations.

Financial highlights

• Underlying EPS up 42% to GBP 1.071 (107.1p); underlying revenue increased 20.1% year-over-year to £2,576.4m.

• Underlying operating profit up 34.8% to £1,059.5m; underlying revenue up GBP 431 million.

• CapEx spend rose 41% to GBP 1.5 billion, with asset base growing 7.5% to GBP 16.5 billion.

• Regulatory return reached 13%; final dividend set at GBP 0.3578 (35.78p) per share.

• Gearing maintained at 60%, within 55%-65% target range; robust balance sheet with GBP 1.5 billion term funding raised.

Outlook and guidance

• FY 2027 CapEx expected to rise to GBP 2 billion; asset base growth projected at 10%.

• Underlying revenue for next year guided at GBP 2.7–2.8 billion; operating costs to rise by GBP 100 million.

• Dividend policy remains progressive and inflation-linked, with next year’s dividend expected at GBP 0.5554 per share.

• Upgraded returns guidance to 10%-11% nominal for AMP8, with RCV annualized growth at 10%.