UK's United Utilities interim revenue rises 9%, capex jumps

Overview

• UK water utility's interim revenue rose 9% yr/yr to £1.41 bln

• Adjusted operating profit for the half-year increased 7% yr/yr

• Company accelerated capital investment, delivering £993 mln in regulatory capex in 1H

Outlook

• Company expects 2026/27 revenue between a32.7 bln and a32.8 bln

• Capex in 2026/27 expected to be more than a32 bln

• Company forecasts a customer ODI penalty for 2026/27, improved from c.a335 mln penalty in 2025/26

Result Drivers

• REGULATORY REVENUE INCREASE - Co said underlying revenue growth was driven by a 7% real increase in allowed wholesale revenues and a 3.5% CPIH-linked increase to the revenue cap

• OPERATING COSTS - Higher operating costs were mainly due to growth in the asset base and price increases, including pay inflation, regulatory fees and power

• CAPITAL INVESTMENT - Accelerated capital investment supported operational and environmental improvements, with £993 mln capex delivered in 1H

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the water & related utilities peer group is "buy"

• Wall Street's median 12-month price target for United Utilities Group PLC is GBp1,475.00, about 4.2% below its November 11 closing price of GBp1,540.00

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 13 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)