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United Utilities: strong H1, full-year guidance on track

United Utilities posted double-digit revenue and profit growth, with performance buoyed by inflation-linked price increases.
United Utilities - Rising costs to weigh on profits

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United Utilities first-half underlying revenue rose 10.9% to £1.1bn, largely due to inflation-linked tariff increases.

Underlying operating profit climbed 23.8% higher to £335.7mn, driven by the top line growth which more than offset increased operating costs.

Free cash flow rose from £24.1mn to £38mn as increased cash generation more than offset higher investment spending. Net debt rose from £8.5bn to £9.1bn.

Full-year guidance has been reiterated. Revenue is expected to rise by around 10%, and underlying operating costs are set to grow faster than inflation.

An interim dividend of 17.28p was announced, up 4.2%.

The shares were broadly flat in early trading.

Our view

HL view to follow.

United Utilities key facts

All ratios are sourced from Refinitiv, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.

This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment.No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.Non - independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place(including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.Please see our full non - independent research disclosure for more information.
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Written by
Aarin Chiekrie
Aarin Chiekrie
Equity Analyst

Aarin is a member of the Equity Research team. Alongside our other analysts, he provides regular research and analysis on individual companies and wider sectors. Having a keen interest in global economics, he knows how macro-events can impact individual companies.

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Article history
Published: 14th November 2024