United Utilities Group PLC on Wednesday said it has accepted the final determination of price controls set out by water industry regulator Ofwat in December, which is set to raise £13 billion for the firm to invest in infrastructure across the North West of England.
The Ofwat scheme, covering the five years to March 2030, will see the Warrington, England-based water and wastewater services provider increase its prices for customers, meaning typical households across the UK will see bills rise by an average of £86 this April.
The price hike comes amid high levels of sewage spills and underinvestment in pipes, sewers and reservoirs over the last decade, for which water companies such as United Utilities have pushed for higher bills, to invest in improvements.
‘With the final determination agreed, we are now able to progress what will be the largest investment in water and wastewater infrastructure in over 100 years, to build a stronger, greener and healthier North West. This historic £13 billion investment will support 30,000 jobs across the North West, bringing focused investment in skills and opportunities, supporting economic growth in our region,’ said Chief Executive Officer Louise Beardmore.
The investment will be funded by the rise in bills, United Utilities noted. The company also will continue to upgrade its dividend in line with the rises in the consumer prices index, including owner occupiers’ housing costs.
The announcement comes as peer Pennon Group PLC on Wednesday launched a £490 million equity raise to support the investment required by Ofwat’s five-year plan. Pennon said the funds would go towards ‘increased investment in the water businesses’, and proposed a rights issue of 185.9 million new shares at 264 pence each, on the basis of 13 new shares for every 20 existing shares.
Pennon also revised its dividend policy on the back of Oftwat’s plan, rebasing last year’s £129.3 million total dividend ‘on a dividend per share basis’. The rebased payout will also grow by the CPIH rate of inflation in the UK.
United Utilities maintained its financial 2025 guidance after a ‘strong operating performance’ in the third quarter, adding it remains on track to deliver net outcome delivery incentives rewards higher than the £34.5 million reported last year.
The firm’s financial year ends on March 31.
CEO Beardmore added: ‘Alongside record levels of investment, we are committed to maintaining affordable bills and providing support to customers who need it most.
‘With a sector leading affordability package totalling £525 million, we’re putting in place financial support to approximately one in six households across the North West - that’s approximately a 70% increase in the level of customer support provided this AMP.
‘Most importantly, today’s announcement means we can move forward and deliver the step change in performance we all want to see.’
United Utilities confirms it will target gearing at around 55% to 65%, compared to its current gearing of 60%.
Shares in United Utilities were up 1.0% at 989.80 pence each in London on Wednesday morning, while Pennon shares were up 1.0% at 520.50p each.
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