TIDMUU.
RNS Number : 2663O
United Utilities Group PLC
02 October 2023
2 October 2023
UNITED UTILITIES
PR24 BUSINESS PLAN SUBMISSION & TRADING UPDATE
United Utilities Water Limited has today submitted its business
plan covering the 2025-30 period.
-- GBP13.7 billion total expenditure across 2025-30, driving
significant RCV growth at 8.7% per annum, which equates to over 50%
nominal across the period
-- Boosting the North West economy - our plan will support 30,000 jobs, 7,000 of which are new
-- Supporting more customers with affordability schemes worth
GBP525 million, helping more than 1 in 6 customers
-- Strong balance sheet - 58% gearing today provides flexibility
to finance the full plan with average gearing of 65% over the AMP,
based on Ofwat's WACC assumptions, and without assuming new
equity
-- Plan delivering on what matters to customers, communities and
the environment , with the UK's biggest CSO spill reduction plan,
safeguarding supplies for over 3 million households and halving the
chances of a hosepipe ban in the future
Louise Beardmore, CEO said: "We've been listening to customers
and communities right across our region to understand what really
matters. What's clear is that we need to improve services for
customers and the environment. That's why we are proposing the
largest investment in water and wastewater infrastructure in over
100 years, with GBP13.7 billion planned between 2025 and 2030 to
build a stronger, greener and healthier North West for
everyone.
It's a hugely ambitious plan, and we've engaged with 95,000
people across our five great counties of Cumbria, Lancashire,
Merseyside, Greater Manchester and Cheshire, to make sure we get it
right, shaping our plans for each county to address the things that
they've told us matter most.
Our plan will secure water supplies for the future, halving the
need for hosepipe bans, reduce storm overflow spills into our
rivers and seas and upgrade our water network to cut leakage and
service interruptions for customers.
This historic investment will deliver a significant boost to the
economy of the North West, supporting 30,000 jobs, of which 7,000
are new roles. We will also double our support for those struggling
to pay their bills, with more than half a billion pounds of extra
help - enabling us to support more than one in six households.
Today's announcement is the first step in a long process but our
robust balance sheet, low gearing and solid credit ratings mean we
are in a very strong position to deliver our plan - and we are
already underway after bringing forward GBP1.2 billion of
investment earlier this year. We are now ready to move forward and
deliver the step change we all want to see."
PR24 Business Plan Submission
This business plan is our most ambitious yet. It is a high
quality plan, meeting all our statutory and regulatory requirements
and delivers on what matters most to our customers. Our proposed
GBP13.7 billion totex plan is both ambitious and stretching. The
investment in our asset base will result in significant growth in
our RCV, at 8.7% per annum, which equates to over 50% nominal
across the AMP.
The plan will see us improve the things that matter most to our
customers
-- Safeguarding supplies for 3 million households as we improve
water quality and security of future supplies and halve the chance
of needing a hosepipe ban in the future
-- The biggest CSO spill reduction programme across the country
with a 60% reduction in spills in the decade to 2030, alongside
protecting and enhancing over 500km of rivers and bathing
waters
-- Pushing the frontier forward on avoiding pollution incidents
with a further 25% improvement between 2025-30
-- Delivering a 25% decrease in leakage over the decade to 2030
as we invest to build a more resilient water network, replacing
over 950 km of pipes and mains and fixing leaks
-- Responding to the challenges of climate change and reducing
internal flooding of homes and businesses by 32%
-- Making bills as affordable as possible for customers , with
an average real bill increase of around GBP22 every year despite
delivering record levels of investment
-- Proposing a comprehensive GBP525 million package of
affordability support , enabling us to help more than 1 in 6
customers meaning we expect no increase in water poverty despite
the increase in bills
-- Igniting the North West economy , by supporting 30,000 jobs, of which 7,000 are new.
Financing the plan
We approach the plan from a robust position, with one of the
lowest gearing levels in the sector at 58% today. This uniquely
positions us to tackle the challenge of delivering and funding our
investment programme in AMP8 and beyond, and what is clear is that
we have options and flexibility around funding this capital
requirement.
In order to align with the Ofwat methodology, our PR24
submission assumes that the programme is funded with equity and
debt, with equity sized to maintain our current A3 rating with
Moody's /A- senior unsecured debt rating with Fitch. Recognising
that Ofwat will be updating their WACC assumption for draft
determinations next summer, we have adopted Ofwat's 'early view'
cost of capital in our business plan submission. On this regulatory
basis, our PR24 submission assumes notional equity of GBP1.35
billion, out of a total capital requirement of around GBP5.2
billion. This gives rise to average gearing across the AMP of
63%.
Alternatively, if the investment programme was funded entirely
with cash and senior debt, we would expect gearing to average
around 65% across the AMP. This is based on our full GBP13.7
billion totex plan, coupled with Ofwat's early view WACC. This also
assumes a continuation of our current dividend policy, and no
outperformance or rewards.
By way of illustration, if the WACC was c.60 bps higher - in
line with an AMP8 independent WACC assessment undertaken by
Frontier Economics c. 3.9% - we would see average gearing levels
around 1.5% lower across the AMP. If adaptive planning decisions
led to a GBP1 billion deferral of totex into AMP9, then that would
result in a further 1% reduction on average. The combination of
both would see group gearing averaging 63% over the AMP, and
remaining within our target range of 55-65%.
We are proposing an ambitious and value for money service
package for customers, resulting in a notional company RoRE
incentive range of -6.3% to +4.4%.
Next Steps
Our plan today represents an important milestone in the price
review process and will frame ongoing discussions as we continue to
work with regulators and Government. What is clear is that we have
options and flexibility to fund the capital requirement. We expect
Ofwat to publish draft determinations in May/June 2024 and final
determinations in December 2024. As in previous price reviews,
following final determinations, we would announce our dividend
policy.
Trading update
Current trading is in line with the group's expectations for the
year ending 31 March 2024, and we reiterate technical guidance for
underlying performance provided at our full year results on 25 May
2023.
Contacts
Investors and Analysts
Chris Laybutt, Investor Relations and Clean
Energy Strategy Director +44 7769 556 858
Anna Oberg, Investor Relations Manager +44 7435 939 112
Media
Gaynor Kenyon, Corporate Affairs Director +44 7753 622 282
Graeme Wilson, Teneo Communications +44 207 353 4200
Our full PR24 business plan can be accessed at the following
link:
https://www.unitedutilities.com/corporate/about-us/our-future-plans/our-business-plan-submissions/our-business-plan-submissions-for-2025-2030
We will be hosting a webcast presentation for investors and
analysts starting at 9.00am on Monday 2 October 2023, which can be
accessed using the following details:
https://us06web.zoom.us/j/84466713632?pwd=TmlRNmY4aEdpYS81MDk3ZWRIRTNhZz09
Meeting ID: 844 6671 3632
Passcode: 317444
This announcement and the associated presentation will be
available at:
https://www.unitedutilities.com/corporate/investors/
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFLFSAIELLIIV
(END) Dow Jones Newswires
October 02, 2023 02:00 ET (06:00 GMT)
Grafico Azioni United Utilities (LSE:UU.)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni United Utilities (LSE:UU.)
Storico
Da Mag 2023 a Mag 2024
