United Utilities Group PLC is the UK's largest listed water company, with revenue of approximately £1.5 billion. The group’s subsidiary, United Utilities Water PLC (UUW), owns and manages the regulated water and wastewater network in the North West of England, serving a population of around seven million people. As part of United Utilities’ continuing focus on its core activities, the group announced in November 2010 that it had completed its non-regulated disposal programme.
UUW is regulated by an independent body, Ofwat, which sets price limits every five years for the water sector in England and Wales. The current price limits took effect from 1 April 2010. Regulated revenue is set by reference to inflation as measured by the retail prices index (RPI). Price cap regulation in the UK is performance based and companies are incentivised to be efficient in terms of their operating costs and capital investment programmes. UUW’s household customers pay just over £1 per day for high quality drinking water and the removal of wastewater which is returned safely to the water environment.
UUW has been funded to deliver a c£3.6bn regulatory capital investment programme during the 2010-15 period, resulting in 12% real growth in UUW’s regulatory capital value (RCV), the capital base from which water companies earn a return. The company’s investment has brought significant benefits to the region: the quality of drinking water has improved further and the region’s rivers and beaches are at their cleanest for generations. United Utilities has retained both its 'World Class' rating in the Dow Jones Sustainability Index and its 'Platinum Plus' ranking in the Business in the Community Corporate Responsibility index.
United Utilities has a robust capital structure and a sustainable dividend policy, targeting 2% per annum growth above the rate of RPI inflation through to at least 2015.