REG - United Utilities Grp - Half-year Financial Report
Today 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251113:nRSM3175Ha&default-theme=true
RNS Number : 3175H United Utilities Group PLC 13 November 2025
13 November 2025: United Utilities today announces half-year results for the
six-month period to 30 September 2025.
Louise Beardmore, Chief Executive Officer, said:
"We have achieved strong operational and financial performance in the first
half of 2026, delivering for customers, communities, and the environment. Our
transformative plan to invest over £13 billion in the North West over the
next five years is on track with our supply chain fully mobilised, boosting
economic growth and supporting 30,000 jobs across United Utilities and the
supply chain.
"Our investment is delivering better environmental performance and improved
infrastructure right across the region. Work is underway to deliver a new
aqueduct safeguarding water supplies for over two million customers in
Manchester, and we're making good progress tackling spills from storm
overflows. Despite a drier spring and early summer, the resilience of our team
and our assets, together with the support of customers using water wisely, has
helped us keep taps flowing and the environment protected. Our integrated
network has allowed us to move water to where it is needed most, avoiding
restrictions on water usage. On top of this, we remain focused on driving down
leakage, with levels of find and fix 30% higher than this time last year.
"On storm overflows, we have a clear strategy of targeted interventions at
hundreds of sites. Overall, spills are down c.40% year-to-date, around
10,000 of which are directly due to our actions. We're making significant
progress towards our long-term target of cutting them by 60% in the decade to
2030.
"We have been driving improvements for customers too: we are one of the few
companies to have hit all targets on customer service; and have earned rewards
across our regulator's three key 'customer experience' measures. Recognising
many households in the North West are facing financial challenges, we've
doubled affordability support for customers, helping more than 400,000
customers with their bills this year."
Key financials - six months ended 30 September
Reported Underlying(1)
£m 2025 2024 % change 2025 2024 % change
Revenue 1,309.2 1,082.0 +21.0% 1,309.2 1,082.0 +21.0%
EBITDA 803.7 573.9 +40.0% 803.7 576.2 +39.5%
Operating profit 561.5 333.4 +68.4% 561.5 335.7 +67.3%
Profit before tax 325.3 140.6 +131.4% 361.0 182.9 +97.4%
Profit after tax 240.0 103.1 +132.8% 359.9 182.9 +96.8%
EPS (pence) 35.2 15.1 +133.1% 52.8 26.8 +97.0%
2025 2024 % change
Interim DPS (pence) 17.88 17.28 +3.5%
Net regulatory capex (£m) 568.5 466.9 +21.8%
RCV(2) (£m) 15,980 14,946 +6.9%
Net debt (£m) 9,610 9,051 +6.2%
RCV gearing(3) (%) 60% 60% 0%
Operational highlights
● Supply chain fully mobilised, over 100 suppliers onboarded and 85% of AMP8
Enterprise projects in design or delivery
● Making great progress on spill reductions, with a c.40% reduction so far this
year we are on track to meet our performance commitment for 2025
● Managing water resources, 30% increase in leakage repairs and a strong start
to our smart metering programme, network fully optimised to manage water
resources during dry spring
● Building in resilience, signing the contract with Cascade Infrastructure for
the delivery of the £3bn Haweswater Aqueduct Resilience Programme
● Strong customer service performance, with a net reward for all Measures of
Experience (MeX's) and affordability support doubling across the AMP
Financial highlights
● Trading in line with expectations and prior guidance
● Underlying operating profit of £562m, +67% on the prior half year, driven by
higher allowed revenues and higher allocation of Infrastructure Renewals
Expenditure (IRE) to capex offset by inflationary pressure on operating costs
● Underlying EPS of 52.8p, up from 26.8p, reflecting a £226m increase to
underlying operating profit partially offset by higher net finance expense
driven by higher inflation, reported EPS of 35.2p
● Low level of gearing at 60% and solid credit ratings, with Moody's, Fitch and
S&P
● Over 24 months of liquidity, with funding in place through to the second half
of FY28
● Interim dividend of 17.88p, in line with policy
AMP8 financial framework
● Targeting to outperform the regulatory contract by at least 100bps
● Capital investment of around £9 billion
● RCV growth guidance of c.7% nominal compound annual growth rate
● Targeting dividend growth in line with CPIH
● Maintain gearing within target range of 55-65%
Enquiries
Investors and Analysts
Chris Laybutt - Investor Relations and Clean Energy Strategy Director +44 7769 556 858
Jenny Platt - Investor Relations Manager +44 7733 064 907
Media
Gaynor Kenyon - Corporate Affairs Director +44 7753 622 282
Graeme Wilson / Louise Male - Teneo Communications +44 207 260 2700
Half year results presentation webcast - Thursday 13 November 2025
There will be a presentation available on our website from 7am at the
following link:
www.unitedutilities.com/corporate/investors/results-and-presentations/full-and-half-year-results/
(http://www.unitedutilities.com/corporate/investors/results-and-presentations/full-and-half-year-results/)
This will be followed by a Q&A with management at 9am, which can be
accessed as follows:
https://us06web.zoom.us/j/84262046467?pwd=Iaxbtf2lIwtHJgPIQHOlRkEIAWupsT.1
(https://urldefense.com/v3/__https:/us06web.zoom.us/j/84262046467?pwd=Iaxbtf2lIwtHJgPIQHOlRkEIAWupsT.1__;!!FvJKb9TgAvphWVQ!aB2-tJmm4KzLCXhHlkTiPySQDm7xjTwehAqByZVNhN1kY53_FfPfPUPlWJhoBvKu0qPtT2IW8YCn_rlHgtkJ35nI$)
Meeting ID: 842 6204 6467, Passcode: 828045
Notes
(1) Underlying measures are defined in the underlying profit section below
(2) United Utilities Water Limited's adjusted RCV (adjusted for actual spend,
timing differences and including expected value of AMP8 ex-post adjustment
mechanisms).
(3) RCV gearing calculated as group net debt including loan receivable from
joint venture/United Utilities Water Limited's adjusted RCV (adjusted for
actual spend, timing differences and including expected value of AMP8 ex-post
adjustment mechanisms).
OPERATIONAL REVIEW
AMP8 delivery on track
A key area of focus for us so far this year has been the commencement of our
AMP8 investment programme. This investment is driving significant
environmental and service improvements, improving river water quality and
supporting economic growth in our region, working with local suppliers where
possible.
Our work to deliver these improvements started over a year ago with
transitional investment in AMP7, and the mobilisation and onboarding of our
supply chain partners. We now have over 100 suppliers onboarded and our
enterprise delivery model is up and running, with over 85% of AMP8 projects in
design or delivery. In parallel, we are committed to do things differently,
exemplified by our award-winning Project Blueprint, which focuses on
standardising our assets to reduce cost, reduce carbon and deliver at pace.
The talent and capability of our people and our supply chain partners is
fundamental to delivery of our AMP8 capital programme. We're proud to have
been awarded the Water Industry Employer of the Year by Utility Week and our
apprenticeship scheme was included in the Times' Top 100 Apprenticeship
Employers 2025. We placed third in British Water's supply chain survey of
water sector supply chain companies, the most improved of all water companies,
testament to our colleagues' hard work in mobilising AMP8 delivery.
A continued focus on the environment
Improving performance on combined sewer overflows remains a top priority.
Building on last year's reduction, the number of spills from storm overflows
is down by c.40% year-to-date and we are on track to meet our 26 spills per
overflow performance commitment for 2025. Our targeted interventions have
delivered around 10,000 fewer spills so far this year, with the remainder of
the reduction driven by dry weather. Overall this represents great progress
towards our long-term target to reduce spills by over 60% in the decade to
2030.
Our interventions include installation of modular, fast acting side stream
treatment units, construction of additional storm storage, the use of tidal
control valves to prevent ingress from river/sea water in coastal areas,
introduction of automated storm storage control, and delivery of increased
power resilience to reduce spills that result from power outages. This is all
alongside transitional investment ahead of the start of AMP8. We have been
moving from planning to delivery across the bulk of our AMP8 storm overflow
investments, with live construction works underway across all our five
counties. We're working at pace with around 27 projects moving into delivery
per month, peaking at over 200 sites concurrently at the programme peak.
We have retained our position as the second highest ranked company in the
sector in the Environment Agency's Environmental Performance Assessment (EPA),
with 13 stars out of a possible 16 in the first four years of this EPA cycle.
2024 was a particularly wet and stormy year, and this alongside the EA's
updated approach to measurement of pollution incidents that occur during major
storms, adversely impacted industry ratings for the year. As a result, our
rating was lowered from 4 stars to 2 stars in the 2024 assessment.
Demonstrating our resilience to drought
The start of the year was the driest in over a century, with drought across
the country hitting the national news. We have worked hard to ensure that
there has been sufficient resource for customers and the environment, and in
doing so, avoided the need for restrictions. This is thanks to the agility of
our colleagues, responding quickly to strengthen our capability to move water
around the region, making the most of the rain where it fell.
Maintaining adequate supplies throughout the dry summer also required the
support of our customers. We have supported customers across the North West to
use water wisely through a range of activities, including offering free water
savings visits. We've been playing our part, fixing a record number of leaks
across the system and making a strong start to our metering programme.
We're also improving the resilience of our water supplies, safeguarding water
supply for over two million customers in Manchester through the Haweswater
Aqueduct Resilience Programme (HARP). We're delighted to have signed a
contract with Cascade Infrastructure to deliver this flagship project for our
region.
Providing a great service for customers
We remain committed to delivering great service for our customers. We are
currently tracking to achieve reward for all three regulatory customer service
incentives, C-MeX, D-MeX and Br-MeX, based on performance in H1. We are also
pleased to see resilience in our cash collection, leading to bad debt tracking
in line with management expectations.
Our plan for AMP8 sees us doubling affordability support, with a package of
£525m supporting one in six households in the region. So far this year, we
have supported over 400,000 customers with affordability, and over 580,000
customers registered to receive tailored support through Priority Services.
Regulatory update
The Independent Water Commission was tasked to develop a set of
recommendations to reform the water sector regulatory system. The final report
was published on 21st July and set out 88 recommendations to drive fundamental
change in the industry. We have been actively involved in the consultation
process, and are encouraged by emphasis on long term policy and regulation,
place-based planning and delivery, regulatory clarity and confidence, and
protecting and communicating with customers.
Government has already responded to five of the 88 recommendations:
● Establish a single regulator, bringing together Ofwat and the Drinking Water
Inspectorate, with the water functions of the Environment Agency and Natural
England. Ofwat will remain in place during the transition to the new regulator
● Introduce a new statutory water ombudsman to handle customer complaints
● Review of operator self-monitoring and transition to open monitoring
● Establish a regional element within the new regulator
● Commitment for the regulatory framework to recognise investor risk and provide
a fair, stable return on investment
It will require further policy work, multiple consultations, and primary
legislation to implement the full findings. The Secretary of State, Department
for Environment, Food and Rural Affairs, noted that the Government will
publish its response to the Commission's report in December via a transition
plan, as well as a white paper on future water reforms, an interim strategic
policy statement and a ministerial direction to the Environment Agency.
FINANCIAL FRAMEWORK
Our financial framework below is unchanged from 2024/25 full year results.
Investment and regulated asset growth
Our capital programme for the five years to March 2030 (AMP8) is significantly
larger than previous regulatory periods, due to a number of long-term
investment drivers, meaning we expect to see our regulated assets grow at a
compound annual growth rate of around 7 per cent.
Return on regulated equity
The return on regulatory equity (RoRE) metric measures returns (after tax and
interest) earned by reference to notional regulated equity. Overall returns
comprise a base return on equity plus a contribution from outcome delivery
incentives, price control deliverables, operating efficiency, financing and
tax efficiency and customer service. We currently aim to outperform the
regulatory contract by at least 100 bps.
Capital investment
Capital investment is forecast to be approximately £9 billion across the five
years to March 2030, representing an uplift of around £5 billion compared to
AMP7.
Balance sheet
The board has maintained a target gearing range of 55 to 65 per cent net debt
to regulated capital value. As at 30 September 2025, our gearing is
comfortably in the middle of this range at 60 per cent.
Dividend policy
The group maintains a dividend policy to target a growth rate of CPIH
inflation each year, having increased the dividend at least in line with
inflation for the last 15 years. The annual increase in the dividend is based
on the CPIH element included within allowed regulated revenue for the current
financial year. This is calculated using the CPIH annual rate from the
November prior (i.e. the 2025/26 dividend is equal to the 2024/25 dividend
indexed for the movement in CPIH between November 2023 and November 2024).
FY26 OUTLOOK AND GUIDANCE
ODIs
We are forecasting to incur a net customer ODI penalty for 2025/26,
recognising the introduction of new measures in AMP8, with performance
improvements expected to be progressive.
Revenue
Revenue is expected to increase to between £2.5 billion and £2.6 billion in
2025/26 in line with the final determination, adjusted for inflation.
Underlying operating costs
Underlying operating costs are expected to decrease, with higher costs
associated with inflation and growth in the asset base, more than offset by
lower IRE due to a more granular asset recognition, resulting in the greater
component of network expenditure being capitalised.
Depreciation
With continued growth in our asset base and the impact of a more granular
asset recognition, depreciation is expected to increase by around £50 million
year on year.
Underlying net finance expense
Underlying net finance expense is expected to increase by around £50 million
year on year, due to increased debt requirements to fund the step up in
investment in AMP8. As at 31 March 2025, we had £4.7 billion of index-linked
debt exposure, giving rise to a £47 million swing in our annual interest
charge for every 1 per cent change in inflation.
Underlying tax
Our current tax charge is expected to be negligible in 2025/26, reflecting
expected benefits in relation to 'full expensing' and the 50 per cent first
year allowances on longer life assets.
EPS
Based on the guidance above, we expect earnings per share in 2025/26 to be
around 100 pence.
Capital expenditure
Capex in 2025/26 is expected to be c.£1.5 billion.
FINANCIAL REVIEW
Key financials (£m) - six months ended 30 September
Reported Underlying(1)
2025 2024 % change 2025 2024 % change
Revenue 1,309.2 1,082.0 +21.0% 1,309.2 1,082.0 +21.0%
Operating expenses (486.8) (414.5) +17.4% (486.8) (413.8) +17.6%
Infrastructure renewals expenditure (18.7) (93.6) -80.0% (18.7) (92.0) -79.7%
EBITDA 803.7 573.9 +40.0% 803.7 576.2 +39.5%
Depreciation and amortisation (242.2) (240.5) +0.7% (242.2) (240.5) +0.7%
Operating profit 561.5 333.4 +68.4% 561.5 335.7 +67.3%
Net finance expense (232.7) (193.4) +20.3% (197.0) (153.4) +28.4%
Share of (losses)/profits of JVs (3.5) 0.6 n/a (3.5) 0.6 n/a
Profit before tax 325.3 140.6 +131.4% 361.0 182.9 +97.4%
Tax charge (85.3) (37.5) +127.5% (1.1) - n/a
Profit after tax 240.0 103.1 +132.8% 359.9 182.9 +96.8%
EPS (pence) 35.2 15.1 +133.1% 52.8 26.8 +97.0%
( )
2025 2024 % change
Interim DPS (pence) 17.88 17.28 +3.5%
Net regulatory capex (£m) 568.5 466.9 +21.8%
RCV(2) (£m) 15,980 14,946 +6.9%
Net debt (£m) 9,610 9,051 +6.2%
RCV gearing(3) (%) 60% 60% 0%
( )
(1) Underlying measures are defined in the tables in the underlying profit
section below
(2) United Utilities Water Limited's adjusted RCV (adjusted for actual spend,
timing differences and including expected value of AMP8 ex-post adjustment
mechanisms).
(3) RCV gearing calculated as group net debt including loan receivable from
joint venture/United Utilities Water Limited's adjusted RCV (adjusted for
actual spend, timing differences and including expected value of AMP8 ex-post
adjustment mechanisms).
( )
We have delivered strong financial performance in the first half of the year.
Revenue increased 21 per cent in line with allowances set out in our PR24
Final Determination. This revenue increase, along with broadly flat costs due
to a higher capital allocation of IRE offsetting inflationary pressure on
operating costs, resulted in an underlying operating profit of £562 million,
a 67 per cent increase compared to the prior half year.
Non-cash interest expense on our index-linked debt increased, resulting in an
underlying profit after tax of £360 million and underlying earnings per share
of 52.8 pence. Reported profit after tax was lower at £240 million, with
reported earnings per share of 35.2 pence. Adjusted items between underlying
and reported are set out in the underlying profit section below.
Our balance sheet remains one of the strongest in the sector. With RCV gearing
at 60% alongside robust credit ratings, we have funding flexibility across the
AMP.
Revenue
£m
Six months to 30 September 2024 1,082.0
Regulatory revenue impact 242.8
Other impacts (15.6)
Six months to 30 September 2025 1,309.2
Revenue was up £227 million at £1,309 million, with £243 million
attributable to regulatory adjustments. Adjustments include a c.23% real
increase in allowed wholesale revenues as set out in our PR24 Final
Determination as well as a 3.5 per cent CPIH-linked increase to the revenue
cap, partially offset by prior period adjustments in respect to consumption.
Other revenue impacts largely reflect a reduction in non-household revenue due
to increased vacant properties.
Operating profit
£m
Underlying - Six months to 30 September 2024 335.7
Revenue increase 227.2
Higher capital allocation of IRE 70.8
Employee costs and contracted services (36.6)
Power and materials (28.9)
Cash collection and other (6.7)
Underlying operating profit - Six months to 30 September 2025 561.5
Adjusted items* -
Reported - Six months to 30 September 2025 561.5
* Adjusted items are set out in the underlying profit section below.
Underlying operating profit at £562 million was £226 million higher than the
first half of last year, reflecting the increase in revenue, and broadly flat
operating costs. Excluding IRE, operating costs increased compared to the
prior half year primarily due to inflationary impacts across employee costs,
power and materials, alongside rising headcount and expenditure associated
with the expansionary impact of AMP8 and dry weather. These increases were
offset by a higher capital allocation of IRE.
Reported operating profit was equal to underlying operating profit, with no
adjusting items in the first half of the year.
Our industry-leading affordability schemes, combined with effective credit
collection practices and utilisation of technology, have meant that current
year cash collection has been strong. Our bad debt position at 1.8 per cent of
statutory revenue is tracking in line with management expectations.
Profit before tax
£m
Underlying - Six months to 30 September 2024 182.9
Underlying operating profit increase 225.8
Underlying net finance expense increase (43.6)
Share of JVs losses increase (4.1)
Underlying profit before tax - Six months to 30 September 2025 361.0
Adjusted items * (35.7)
Reported - Six months to 30 September 2025 325.3
* Adjusted items are set out in the underlying profit section below.
Underlying profit before tax is £361 million compared to £183 million
underlying profit before tax in the first half of last year. The £178 million
increase reflects the £226 million increase in underlying operating profit,
partially offset by a £44 million increase in underlying net finance expense,
and a £(4) million increase in the share of losses of joint ventures.
Reported profit before tax is £36 million lower at £325million, reflecting
adjustments outlined in the underlying profit section below.
● Net finance expense
£m
Underlying - Six months to 30 September 2024 153.4
Increase in non-cash indexation on debt and derivatives 35.8
Increase in net interest payable on debt, derivatives and cash 23.9
Increase in capitalised interest (14.7)
Increase in pension interest income (2.3)
Other 0.9
Underlying net finance expense - Six months to 30 September 2025 197.0
Adjusted items * 35.7
Reported - Six months to 30 September 2025 232.7
* Adjusted items are set out on in the underlying profit section below.
The underlying net finance expense of £197 million was £44 million higher
than in the same period last year mainly due to significantly higher inflation
resulting in a £36 million increase in non-cash indexation on our debt and
derivative portfolio, partly offset by an increase in capitalised interest and
pension interest income, as well as an increase in cash interest.
Cash interest expense has increased by £37 million, primarily reflecting the
increase in debt to fund the AMP8 capital programme.
Reported net finance expense is £36 million higher than underlying net
finance expense, reflecting adjustments outlined in the underlying profit
section below.
● Joint ventures
The group incurred a share of the losses of Water Plus for the six months
ended 30 September 2025 of £(3.5) million all of which has been recognised in
the income statement, compared to a share of the profits of Water Plus of
£0.6 million for the six months ended 30 September 2024. This difference is
mainly due to higher expected credit losses following an in depth review of
Water Plus's customer receivables position.
Profit after tax and earnings per share
PAT Earnings per share
£m Pence/share
Underlying - Six months to 30 September 2024 182.9 26.8
Underlying profit before tax increase 178.1
Tax charge (1.1)
Underlying profit after tax - Six months to 30 September 2025 359.9 52.8
Adjusted items * (119.9)
Reported - Six months to 30 September 2025 240.0 35.2
* Adjusted items are set out in the underlying profit section below.
The underlying profit after tax of £360 million was £177 million higher than
the first half of last year, reflecting the increase to underlying profit
before tax.
Reported profit after tax was lower at £240 million with reported earnings
per share at 35.2 pence. Adjusted items between underlying and reported set
out in the underlying profit section below.
● Tax
For the six months ended 30 September 2025 2024
£m £m
Current tax 1.1 -
Deferred tax 84.2 37.5
Effective tax rate 26% 27%
Tax adjustments taken to equity (2.4) 2.8
We continue to be fully committed to paying our fair share of tax and acting
in an open and transparent manner in relation to our tax affairs, and are
delighted to have been accredited with the Fair Tax Mark again in 2025 for the
seventh year running.
In addition to corporation tax, the group makes further contributions to the
public finances, typically of around £288 million per annum, in the form of
business rates, employer's national insurance contributions, environmental
taxes, other regulatory service fees such as water abstraction charges as well
as employment taxes on behalf of our 6,940 strong workforce.
The key reconciling item to the headline rate of corporation tax continues to
be allowable tax deductions on capital investment, these being deductions put
in place by successive governments to encourage such investment and thus
reflecting responsible corporate behaviour in relation to taxation.
In the period, there were £2 million of tax adjustments taken to equity,
primarily relating to remeasurement movements on the group's defined benefit
pension schemes and on hedge effectiveness.
Dividend per share
The Board has announced an interim dividend of 17.88 pence per ordinary share
in respect of the six months ended 30 September 2025. This is an increase of
3.5 per cent compared with the interim dividend last year, in line with the
group's dividend policy of targeting a growth rate of CPIH inflation each
year. The 3.5 per cent increase is based on the CPIH element included within
allowed regulated revenue for the 2025/26 financial year (i.e. the movement in
CPIH between November 2023 and November 2024).
The interim dividend is expected to be paid on 2 February 2026 to shareholders
on the register at the close of business on 19 December 2025. The ex-dividend
date for the interim dividend is 18 December 2025.
A dividend reinvestment plan (DRIP) is provided by Equiniti Financial Services
Limited. The DRIP enables the company's shareholders to elect to have their
cash dividend payments used to purchase the company's shares. More information
can be found at www.shareview.co.uk/info/drip
(https://urldefense.com/v3/__http:/www.shareview.co.uk/info/drip__;!!FvJKb9TgAvphWVQ!ZQcXqVPW7-CX6Mu2eJ844HadQqtQxFVhRWSvtDb2G_pkAJ6eNPrgzFZFKed_52ajmgKBNPFW-6xBGoefNhMz9Hbe1mP4vZAU_wSb$)
. The closing date for DRIP elections is 12 January 2026.
The ISIN for UUG is GB00B39J2M42 and the TIDM is UU.
Cash flow
Net cash generated from operating activities for the six months to 30
September 2025 was £687 million, £214 million higher than in the same period
last year, principally due to increased revenue. This is partially offset by
higher net interest paid on debt and derivatives as a result of higher debt
associated with the AMP8 capital programme. The net cash generated from
continuing operating activities supports the dividends paid of £236 million
and partially funds some of the group's net capital expenditure of £619
million, with the balance being funded by net borrowings and cash and cash
equivalents.
Pensions
As at 30 September 2025, the group had an IAS 19 net pension surplus of £293
million, compared with a surplus of £302 million at 31 March 2025. This £9
million decrease has been driven predominantly by an £18 million
remeasurement loss, due to an increase in gilt yields which reduces the scheme
asset values by more than the scheme liabilities, actual inflation in the
period being higher than expected and overall life expectancies being slightly
higher than assumed at the previous year-end. The remeasurement loss is
partially offset by net pension income credited to the income statement before
tax of £6m.
Further detail on pensions is provided in note 11 ('Retirement benefit
surplus') of these condensed consolidated financial statements.
Financing
Net debt £m
At 31 March 2025 9,345.5
Cash generated from operations (807.0)
Net capital expenditure 619.2
Dividends 235.7
Indexation 128.8
Interest 120.7
Fair value movements (69.3)
Exchange rate movements on bonds and term borrowings 46.3
Repayment of loans by joint ventures (17.5)
Other 7.4
At 30 September 2025 9,609.8
Net debt at 30 September 2025 was £9,610 million, compared with £9,346
million at 31 March 2025. This comprises gross borrowings with a carrying
value of £11,378 million, net derivative liabilities hedging specific debt
instruments of £20 million and cumulative indexation on inflation swaps of
£148 million and is net of cash and bank deposits of £1,936 million.
Gearing, measured as group net debt including a £55 million loan receivable
from joint venture divided by UUW's adjusted RCV (adjusted for actual spend,
timing differences and including full expected value of AMP8 ex-post
adjustment mechanisms) of £16 billion, was 60 per cent at 30 September 2025.
● Cost of debt
As at 30 September 2025, the group had approximately £3.5 billion of
RPI-linked instruments and £0.5 billion of CPI or CPIH-linked instruments
held as debt. Including swaps, the group has RPI-linked debt exposure of £3.4
billion at an average real rate of 1.4 per cent, and £1.4 billion of CPI or
CPIH-linked debt exposure at an average real rate of -0.6 per cent.
A significantly higher RPI inflation charge compared with the same period last
year contributed to the group's average effective interest rate of 5.3 per
cent being higher than the rate of 4.3 per cent last half year. More
information on this can be found in the average effective interest rate
section below.
The group has fixed the interest rates on its non index-linked debt in line
with its 10-year reducing balance basis at an average effective nominal
interest rate of 4.0% for the current financial year. The rate for the current
financial year will continue to be impacted by any additional fixing
undertaken in line with the group's hedging policy over the course of the
current financial year.
● Credit ratings
UUW's senior unsecured debt obligations are rated Baa1 with Moody's Investors
Service Ltd (Moody's), A- with Fitch Ratings Ltd (Fitch) and BBB+ with S&P
Global Ratings UK Limited (S&P). United Utilities PLC's senior unsecured
debt obligations are rated Baa2 with Moody's, BBB+ with Fitch and BBB- with
S&P. All ratings are on a stable outlook.
● Debt financing
The group has access to the international debt capital markets through its
£10 billion medium-term note (MTN) programme.
In the six months to September 2025, we raised c£700 million of term funding.
This consisted of £520 million in the public bond markets, including a
EUR500m 10-year green public bond issued in August and a EUR100m tap of our
existing EUR 3.75% bond due 2034, and £175m of renewed and/or increased
committed facilities with relationship banks.
Since 30 September, we have executed and drawn a £100m bank term loan with an
initial maturity of 5-years plus two 1-year extension options.
● Interest rate management
Long-term sterling inflation index-linked debt provides a natural hedge to
assets and earnings under the regulatory model. At 30 September 2025,
approximately 36 per cent of the group's net debt was in RPI-linked form,
representing around 21 per cent of UUW's regulatory capital value (RCV), with
an average real interest rate of 1.4 per cent. A further 14 per cent of the
group's net debt was in CPI or CPIH-linked form, representing around 8 per
cent of UUW's RCV, with an average real rate of -0.6 per cent. The long-term
nature of this funding also provides a good match to the company's long-life
infrastructure assets and is a key contributor to the group's average term
debt maturity profile, which is around 15 years.
At our full year results, we announced a change to our inflation-linked
funding policy, whereby across AMP8 we expect to move from having around half
of our net debt in index-linked form to around a third. This reflects a
balanced assessment across a range of factors, and will happen progressively
over the period.
Where nominal debt is raised in a currency other than sterling and/or with a
fixed interest rate, the debt is generally swapped to create a floating rate
sterling liability for the term of the debt. To manage exposure to medium-term
interest rates, the group fixes underlying interest costs on nominal debt out
to ten years on a reducing balance basis.
● Liquidity
Short-term liquidity requirements are met from the group's normal operating
cash flow and its short-term bank deposits and supported by committed but
undrawn credit facilities. Our MTN programme provides further support.
At 30 September 2025, we had liquidity through to the second half of FY28,
comprising cash and bank deposits, plus committed undrawn revolving credit
facilities. This gives us flexibility in terms of when and how further debt
finance is raised to help refinance maturing debt and support the delivery of
our ongoing capital investment programme.
Underlying profit
The underlying profit measures in the following table represent alternative
performance measures (APMs) as defined by the European Securities and Markets
Authority (ESMA). These measures are linked to the group's financial
performance as reported in accordance with UK-adopted international accounting
standards and the requirements of the Companies Act 2006 in the group's
consolidated income statement. As such, they represent non-GAAP measures.
These APMs can assist in providing a representative view of business
performance, and may not be directly comparable with similarly titled measures
presented by other companies. The group determines adjusted items in the
calculation of its underlying measures against a framework which considers
significance by reference to profit before tax, in addition to other
qualitative factors such as whether the item is deemed to be within the normal
course of business, its assessed frequency of reoccurrence and its volatility,
which is either outside the control of management and/or not representative of
current year performance.
In addition, a reconciliation of the group's average effective interest rate
has been presented, together with a prior period comparison. In arriving at
net finance expense used in calculating the group's effective interest rate,
underlying net finance expense is adjusted to add back net pension interest
income and capitalised borrowing costs in order to provide a view of the
group's cost of debt that is better aligned to the return on capital it earns
through revenue.
Adjusted item Rationale
Consistently applied presentational adjustments
Fair value losses/(gains) on debt and derivative instruments, excluding Fair value movements on debt and derivative instruments can be both very
interest on derivatives and debt under fair value option significant and volatile from one period to the next, and are therefore
excluded in arriving at underlying net finance expense as they are determined
by macro-economic factors that are outside of the control of management and
relate to instruments that are purely held for funding and hedging purposes
(not for trading purposes). Included within fair value movement on debt and
derivatives is interest on derivatives and debt under fair value option. In
making this adjustment it is appropriate to add back interest on derivatives
and debt under fair value option to provide a view of the group's cost of debt
which is better aligned to the return on capital it earns through revenue.
Taking these factors into account, management believes it is useful to adjust
for these fair value movements to provide a more representative view of
performance.
Deferred tax adjustment Management adjusts to exclude the impact of deferred tax in order to provide a
more representative view of the group's profit after tax and tax charge for
the year given that the regulatory model allows for cash tax to be recovered
through revenues, with future revenues allowing for cash tax including the
unwinding of any deferred tax balance as it becomes current. By making this
adjustment, the group's underlying tax charge does not include tax that will
be recovered through revenues in future periods, thus reducing the impact of
timing differences.
Tax in respect of adjustments to underlying profit before tax Management adjusts for the tax impacts of the above adjusted items to provide
a more representative view of current year performance.
Six months ended Six months ended Year ended
30 September 30 September 31 March
Underlying profit 2025 2024 2025
£m £m £m
Operating profit per published results 561.5 333.4 631.5
Fleetwood outfall pipe fracture - 2.3 2.3
Underlying operating profit 561.5 335.7 633.8
Net finance expense
£m £m £m
Finance expense (280.2) (245.1) (371.9)
Investment income 47.5 51.7 106.2
Net finance expense per published results (232.7) (193.4) (265.7)
Adjustments:
Fair value losses/(gains) on debt and derivative instruments, excluding 35.7 40.0 (18.7)
interest on derivatives and debt under fair value option
Underlying net finance expense (197.0) (153.4) (284.4)
£m £m £m
Share of (losses)/profits of joint ventures (3.5) 0.6 (10.8)
Profit before tax per published results 325.3 140.6 355.0
Adjustments:
In respect of operating profit - 2.3 2.3
In respect of net finance expense 35.7 40.0 (18.7)
Underlying profit before tax 361.0 182.9 338.6
Profit after tax per published results 240.0 103.1 264.7
Adjustments:
In respect of profit before tax 35.7 42.3 (16.4)
Deferred tax adjustment 84.2 37.5 90.0
Underlying profit after tax 359.9 182.9 338.3
Earnings per share
£m £m £m
Profit after tax per published results (a) 240.0 103.1 264.7
Underlying profit after tax (b) 359.9 182.9 338.3
Weighted average number of shares in issue, in millions (c) 681.9 681.9 681.9
Earnings per share per published results, in pence (a/c) 35.2 15.1 38.8
Underlying earnings per share, in pence (b/c) 52.8 26.8 49.6
Dividend per share, in pence 17.88 17.28 51.85
In arriving at net finance expense used in calculating the group's effective
interest rate, management adjusts underlying net finance expense to add back
pension income and capitalised borrowing costs in order to provide a view of
the group's cost of debt that is better aligned to the return on capital it
earns through revenue.
Six months ended Six months ended Year ended
Average effective interest rate 30 September 2025 30 September 2024 31 March
2025
£m £m £m
Underlying net finance expense (197.0) (153.4) (284.4)
Adjustments:
Net pension interest income (8.7) (6.4) (12.9)
Adjustment for capitalised borrowing costs (45.7) (31.0) (68.5)
Net finance expense for effective interest rate (251.4) (190.8) (365.8)
Average notional net debt(1) (9,543) (8,886) (9,057)
Average effective interest rate 5.3% 4.3% 4.0%
Effective interest rate on index-linked debt 6.4% 4.6% 4.3%
Effective interest rate on other debt 4.2% 3.9% 3.8%
( )
(1) Notional net debt is calculated as the principal amount of debt to be
repaid, net of cash and bank deposits, taking: the face value issued of any
nominal sterling debt, the inflation accreted principal on the group's index
linked debt, and the sterling principal amount of the cross currency swaps
relating to the group's foreign currency debt.
PRINCIPAL RISKS AND UNCERTAINTIES
Our approach to risk management
Our approach to risk management, including how we identify and assess risk,
the oversight and governance process and focus on continual improvement
remains largely unchanged from last year as described in our Annual Report.
Risk profile
A key feature of the business risk profile is inherent risk areas. These are
categories of risk that are based on the value chain of the company,
reflecting the interrelationship of the primary (water service and wastewater
service including bioresources), and supportive activities or areas of
responsibility such as finance, supply chain, environment and health and
safety where value can be gained, preserved or lost. As a result, the inherent
risk areas support the identification and/or gap analysis of all types of
risks, facilitate analysis of correlation and interdependency, and provide the
platform for determining risk appetite and tolerance, which in turn helps us
to articulate our direction and priorities to support decision-making around
risk and resilience. Underpinning the inherent risk areas are approximately
100 event-based risks, which are inherent to the company's objectives and
obligations, and cover core elements of the production lines, systems,
networks and activities across the business. Each event-based risk remains
dynamic by reflecting new and emerging circumstance relative to the
ever-changing external threats and internal vulnerabilities.
We have identified a number of common causal and consequence themes that
relate to multiple risks. This allows us to understand correlating risk
enabling us to take a holistic view of the strengths, weaknesses and gaps in
our controls, and to consider the short, medium and long-term implications of
risks materialising. Categorisation indicates seven causal themes and six
consequence themes:
● Causal themes: asset health; climate change/extreme weather; culture;
demographic change; economic conditions; legislative and regulatory change;
and technology and data.
● Consequence themes: environmental impact; investors; non-compliance; people;
service delivery; and suppliers.
Our principal risks
In January 2024, the FRC published a revised UK Corporate Governance Code (the
code), with the most significant change being in respect of Provision 29 which
relates to the board monitoring the risk management and internal control
framework. In accordance with the revised code, the board will make a
declaration of the effectiveness of material controls from financial year
2026/27, which will supplement the existing annual assessment of risk
management and internal control systems. As we take steps in preparation for
the material controls declaration we have, as reported in last year's Annual
Report, renewed our definition of which event-based risks, individually or
collectively, are to be considered as a principal risk:
● Material impact risks - risks, which in the maximum worst case, have severe
one-off financial and non-financial impacts; and
● Significant long-term risks - risks with significant exposure (likelihood of
occurrence of the event multiplied by the most likely financial impact over
the long-term after consideration of the current control environment).
Our principal risks therefore represent those risks which, in a remote but
plausible scenario, could initiate corporate failure (material impact risks)
and those risks which are likely to have a significant long-term impact on
company value if they were to crystallise. As our definition of material
impact risks highlights those risks that have the most significant impact (if
they crystallise in the worst case), it naturally identifies risks which place
significant reliance on mitigating controls. Therefore, our future material
controls declaration will be in respect of the key controls which mitigate our
material impact risks.
A. Strategic aqueduct failure Material impact & Long-term risk
Risk exposure: We own and operate nine aqueducts, which transfer water from
major treatment works and large service reservoirs to the wider network. Asset
deterioration and damage (caused by third party or natural event) are key risk
factors to water supply and/or quality relative to large proportions of our
customer base. The Haweswater Aqueduct is the most significant asset of this
type and currently has the lowest level of resilience.
Control/mitigation: We are committed to delivering a resilient supply of
water. Material controls are:
● Rehabilitation/restoration: Current initiatives include the Haweswater
Aqueduct Resilience Programme and Vyrnwy Aqueduct Modernisation Programme.
● Contingency plans: Plans to minimise environmental damage and deploy
alternative supply options.
Other controls include protective easements, inspections, and monitoring of
flow, pressure and turbidity via sensors and alarms.
Governance: Water quality first board; and Water price control.
Assurance: Engineering team technical reviews; Assurance team reviews; and
cyclical internal audits.
B. Treatment and transportation of wastewater Material impact & Long-term risk
Risk exposure: We own and operate network and treatment assets to collect and
treat wastewater before it is safely returned to the environment. Risk factors
to the hydraulic and operational capacity include: population growth; extreme
weather (amplified by climate change); increased surface runoff due to
residential and commercial developments; improper or harmful use of the sewer
systems; and inherent asset health issues. Consequential failure, now subject
to tightening legislation, can result in unpermitted storm or emergency
overflow activations, sewer flooding and environmental damage.
Control/mitigation: We focus on providing reliable and resilient wastewater
services. Material controls are:
● Serviceability: Desilting, cleaning and maintenance of sewers and wet wells.
● Maintenance: Inspection, servicing, repair and replacement of assets due to
proactive and reactive activity.
● Dynamic Network Management: Proactive decision making and action driven by
machine learning system monitoring of strategically placed sensors.
● Licence to operate: Training and competence.
Other controls include customer awareness, trade effluent management and
emergency response. In addition, our Better Rivers programme focuses on
improving river water quality and reducing spills from storm and emergency
overflow operation.
Governance: Wastewater Price control; Flood committee; and Pollution
committee.
Assurance: Assurance team reviews; and cyclical internal audits.
C. Cyber Material impact & Long-term risk
Risk exposure: As we continue to develop our digital capability, we become
more reliant on connected technology, not only in the way we operate, but also
the way in which we communicate with our customers and the wider community.
Cyber incidents continue to grow in all industries with a constantly changing
threat landscape. The potential for data and technology assets to be
compromised is a key risk to business processes and operations.
Control/mitigation: We employ a multi-layer control environment. Material
controls are:
● Infrastructure access controls: Perimeter and internal firewalls, and
intrusion detection systems.
● System access controls: Restrictions to systems, data and internet usage.
● Point protection: Anti-malware suite and mail gateway service which includes
malware detection, transmission protocols, and endpoint actions.
● Monitoring and response: Capability to identify and respond to threats via our
Security Operation Centre.
Other controls include awareness training and business continuity plans.
Governance: Security steering group.
Assurance: Security team reviews; annual internal audit; and external reviews.
D. Water availability Material impact & Long-term risk
Risk exposure: Water availability is a long-term risk for the UK relative to
climate change and increased demand from population growth and increasing
industrial usage. It is one of the most sensitive risks to climate change with
lower-than-average rainfall and changing seasons affecting water resources,
while extended periods of hot weather increases evaporation and demand. Both
the environment and the capacity to supply water can be affected with the
potential for water use restrictions to be implemented. Changing environmental
legislation on abstraction and compensation is also a factor.
Control/mitigation: We are committed to the sustainability and resilience of
water resources. Material controls are:
● Strategy: Our Water Resources Management Plan (WRMP) takes account of climate
and demographic change over short, medium and long-term horizons.
● Production planning: Proactive activity to balance water availability and
production capacity against forecast demand.
● Contingency plan: The Drought Plan sets out the actions we will take in a
drought situation.
Other controls include abstraction and leakage management, and water
efficiency programmes.
Governance: Water quality first board; and Water price control
Assurance: Assurance team reviews; and internal audits.
E. Financial risk Material impact risk
Risk exposure: We are inherently exposed to liquidity, market, credit and
capital risk due to our debt financing, cash and derivative holdings, defined
benefit pension scheme and a significant annual commodity spend, notably
energy. Risk factors include market fluctuations, cost or revenue shocks,
process or system errors or failures (internal or counterparty), and company
or sector poor performance. Impacts can be conflated and range significantly
relating to wholesale revenue, the group's Regulatory Capital Value, the cost
of debt, the cost of goods and services, with the most material impact being
insolvency associated with remote risks such as counterparty failures or a
breach of covenants.
Control/mitigation: We have a robust and prudent approach to financial risk
management. Material controls are:
● Approved limits: Interest, inflation, commodity exposure limits, and credit
rating and financial ratio tolerance levels.
● Control of work: A management system that includes authorisation, transaction
parameters, segregation of duties and supervision.
● Licence to operate: Training and competence.
Other controls include company business planning and monitoring of both
internal and counterparty performance. The banking resolution regime also
provides protection in the event of bank failures.
Governance: Operational compliance review; Executive performance meeting; and
Treasury committee.
Assurance: Cyclical internal audit.
F. Dam failure Material impact risk
Risk exposure: We own and operate a fleet of over 100 dams and service
reservoirs, many of which fall under statutory regulations due to their
significant capacity. The integrity of all dams is fundamental to water
availability, and the safety of society and property downstream. Flood damage,
overtopping, earthquake or erosion could, in remote circumstances, result in
an uncontrolled release of a significant volume of water with catastrophic
implications.
Control/mitigation: Focusing on maintaining extremely low probabilities of
individual dam failure. Material controls are:
● Portfolio Risk Assessment (PRA): Assessment of individual dams in the context
of societal risk.
● Inspections: Regular monitoring by catchment teams and Supervising Engineers.
● Remedial work: Fixes based on PRA or statutory requirements "in the interest
of safety" (ITIOS).
Other controls include ground maintenance to manage vegetation and erosion,
and contingency plans.
Governance: Dam safety group.
Assurance: Assurance team reviews; cyclical internal audits; Panel engineer
inspections.
G. Physical security Material impact risk
Risk exposure: The water industry is classed as one of 13 'Critical National
Infrastructure' (CNI) sectors which are defined as facilities, systems, sites,
information, people, networks and processes, necessary for a country to
function and upon which daily life depends. Within this definition, a number
of specific UU assets are assigned a CNI or 'National Infrastructure' (NI)
designation which in a remote, but significant security incident (such as a
terrorist attack) could be compromised, leading to severe economic and social
consequences.
Control/mitigation: We employ a multi-layered approach in accordance with the
Security and Emergency Measures Direction (SEMD) of the Water Industry Act.
Material controls are:
● Physical access controls: These include gates, fences, security guards, CCTV
and access control systems.
● Monitoring and response: Security alarm management via our Integrated Control
Centre.
Other controls include the physical hardening of assets based on priority and
operational site inspections.
Governance: Security steering group.
Assurance: Security team reviews; Assurance team reviews; cyclical internal
audits and external reviews.
H. Treatment of water Material impact risk
Risk exposure: Threats to water treatment include asset health, process
failure and the contamination (natural, chemical or biological) of raw water.
Climate change is a key factor of raw water contamination due to intensifying
catchment erosion and runoff, more frequent wildfires and increasing algal
bloom which can produce taste and odour problems. Failure to treat water can
lead to non-compliance with regulatory standards, rejection of water by
consumers for aesthetics or, in extreme cases, public health issues.
Control/mitigation: We are committed to providing wholesome drinking water.
Material controls are:
● Sampling and testing: Occurs across the entire system to ensure water is safe
and compliant.
● Sensors and alarms: Monitors deviations from acceptable levels with alarm
triggered response.
● Maintenance: Inspection, servicing, repair and replacement of assets due to
proactive and reactive activity.
● Licence to operate: Training and competence.
Other controls include an end-to-end risk assessment process, contingency
plans, and the monitoring of the regulatory position on emerging contaminants.
Governance: Water quality first board; and Water price control.
Assurance: Scientific service team reviews; Assurance team reviews; and
cyclical internal audits.
I. Health and safety Material impact risk
Risk exposure: Our activities inherently include exposure to chemical,
biological and physical hazards, with the most material impact being a major
incident at one of our process plants (two of which fall under the Control of
Major Accident Hazard (COMAH) regulations). An unintentional release of
chemicals, energy, or other potentially dangerous materials (including steam)
could result in fire, explosion, and toxic releases, which in the worst case,
results in multiple casualties and serious damage to our assets, adjacent
infrastructure/buildings and the environment.
Control/mitigation: We continue to build a strong health and safety culture
and are committed to improving health and safety performance, with process
safety being a primary area of focus. Material controls are:
● Control of work: A management system that includes authorisation, isolation
and permit to work.
● Management of change: Risk assessment and safe, effective implementation of
changes.
● Maintenance: Inspection, servicing, repair and replacement of safety critical
equipment and assets.
● Licence to operate: Training and competence of our staff and contractors.
Other controls include monitoring through sensors and alarms and
emergency/contingency plans.
Governance: Process safety group; and Health & safety board.
Assurance: H&S team reviews; Assurance team reviews; and cyclical internal
audit.
J. Misstatement of reported information Material impact risk
Risk exposure: We are bound by legislation and regulation to provide statutory
financial accounts and regulatory reports to demonstrate financial health,
performance, compliance with legal and regulatory requirements, and provide
information to stakeholders for their ongoing interest and/or investment in
the company. Failure to provide accurate and/or complete information is
reputationally damaging and, depending on the nature of any misstatement or
misreport, could accrue significant penalties and additional scrutiny.
Control/mitigation: We are committed to reporting in an open, compliant and
transparent way. Material controls are:
● Financial controls: A management system including journal procedures,
analytical reviews and control accounts.
● Regulatory reporting framework: A set of principles relating to reporting
criteria, accountabilities, data capture, governance and assurance.
● Validation: The identification of potential errors and reconciliation of
financial parameters.
Other controls include accounting policies, schedules, risk assessment and
management of queries.
Governance: Executive performance meetings; Audit committee; Compliance
committee.
Assurance: Financial control team review; Regulation and compliance team
review; internal audits and external audit.
K. Fraud Material impact risk
Risk exposure: The scale of UU's operations presents multiple opportunities
for fraud to be perpetrated from inside and outside of the company,
potentially impacting us, our stakeholders and third parties. Fraud can be
committed by individuals or groups with examples including false
representation, unauthorised disclosure of personal information, the supply of
inferior products / false invoices and misuse or theft of company property.
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduced a
new corporate offence for failure to prevent fraud, which can carry an
unlimited fine.
Control/mitigation: We are committed to preventing fraud. Material controls
are:
● Control of work: A management system that includes authorisation, delegated
authority, segregation of duties, supervision and data protection procedures.
● System access controls: Restrictions to systems, data and internet usage.
● Procurement and purchasing standards: Strict procedures to procure services
and purchase goods.
● Verification: Checks on invoices, bills and refunds.
Other controls include mandatory awareness training, confidential reporting
and a fraud risk assessment.
Governance: Security steering group; Whistleblowing committee; Audit
committee; and Group board.
Assurance: Departmental review; cyclical internal audit; and external review.
L. Recycling of biosolids Long-term risk
Risk exposure: Wastewater treatment generates significant quantities of sludge
which is subsequently treated to produce biosolids, the majority of which are
recycled to agriculture as the most practical environmental option. A
reduction in the landbank could have significant implications to strategy,
operations, and cost, with a total loss of the land bank being the worst-case
scenario. Threats include: the quality of biosolids; changes in public or
political perception; changes in regulations associated with emerging
contaminants and climate change; and/or the willingness of farmers or
landowners to receive biosolids.
Control/mitigation: Treatment, sampling and testing ensures that quality
standards are met, and we work closely with farmers, landowners and
contractors to ensure compliance with regulations (notably the Biosolids
Assurance Scheme). We are also investing in our sludge treatment assets to
ensure capacity, reliability and environmental compliance is upheld. In
addition, we continue to work closely with regulators to influence policy. We
are also developing contingency plans should regulation change in the near
term, with a notified item included in the final determination enabling an
interim determination (IDOK) if significant investment is required to develop
alternative disposal outlets before 2030.
Governance: Bioresource team review of BAS compliance; and Executive
performance meetings.
Assurance: Assurance team reviews; cyclical internal audit; and external BAS
audits.
M. Programme delivery Long-term risk
Risk exposure: The capital programme involves significant investment in the
development and improvement of point and linear assets through a series of
projects to improve water supply and wastewater services. Delivery to time,
cost and quality is under constant challenge due to ongoing exposure to
natural hazards and the capacity and capability of third parties, partners and
internal resource. This risk is amplified by the significant scale of the
capital programme across this and future asset management periods (AMPs)
coupled with challenging cost allowances and performance commitments.
Control/mitigation: Our capital programme operating model involves multiple
construction and design partners, and a large supplier base, providing both
efficiency and resilience. With strong emphasis placed on safety and the
environment, we adopt a supplier relationship management framework to manage
contracts and performance, a runway approach for project allocation, and
category management for the supply of products and materials. Performance is
measured through our capital programme delivery incentive and monitoring
performance commitment deliverables. For operations a transformation programme
is in development with five clear areas of focus within an agreed
prioritisation framework.
Governance: Project management office; Capital investment committee; and
Executive performance meetings.
Assurance: Assurance team reviews; and cyclical internal audit.
Material litigation
The group robustly defends litigation where appropriate and seeks to minimise
its exposure by establishing provisions and seeking recovery wherever
possible. Litigation of a material nature is regularly reported to the group
board. While our directors remain of the opinion that the likelihood of a
material adverse impact on the group's financial position is remote, based on
the facts currently known to us and the provisions in our financial
statements, the following two cases are worthy of note:
● As reported in previous years, in February 2009, United Utilities
International Limited (UUIL) was served with notice of a multiparty 'class
action' in Argentina related to the issuance and payment default of a US$230
million bond by Inversora Eléctrica de Buenos Aires S.A. (IEBA), an Argentine
project company set up to purchase one of the Argentine electricity
distribution networks that was privatised in 1997. UUIL had a 45 per cent
shareholding in IEBA, which it sold in 2005. The claim is for a non-quantified
amount of unspecified damages and purports to be pursued on behalf of
unidentified consumer bondholders in IEBA. The Argentine Court has scheduled
various hearings to receive the testimony of fact witnesses and experts
(starting in May 2023 and ongoing). UUIL will vigorously resist the
proceedings given the robust defences that UUIL has been advised that it has
on procedural and substantive grounds.
● Collective proceedings in the Competition Appeal Tribunal ('CAT') were issued
on 8 December 2023 against UUW and United Utilities Group PLC on behalf of
approximately 5.6 million domestic customers following an application by the
Proposed Class Representative (PCR), Professor Carolyn Roberts. The PCR
alleges that customers have collectively paid an overcharge for sewerage
services during the claim period (which runs from 1 April 2020 and may
continue into the early years of the PR24 period) as a result of UUW allegedly
abusing a dominant position by providing misleading information to regulatory
bodies. The estimated total aggregate amount the PCR is claiming against UUW
(including interest) is at least £141 million. On 7 March 2025, the CAT
unanimously concluded that claims could not proceed on the basis that the
claims brought forward are excluded by section 18(8) of the Water Industry Act
1991. Subsequently, the PCR has been granted permission by the Court of Appeal
to challenge the CAT's certification decision, with an appeal hearing
currently scheduled for February 2026. UUW believes the claim is without merit
and will robustly defend it, should the certification decision be overturned
on appeal. Separate letters before action were issued on 20 December 2024 in
relation to similar claims in respect of non-household customers, however it
is not clear how these will proceed following the CAT's decision not to
certify the claims brought in respect of domestic customers and any subsequent
appeal decision.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This financial report contains certain forward-looking statements with respect
to the operations, performance and financial condition of the group. By their
nature, these statements involve uncertainty since future events and
circumstances can cause results and developments to differ materially from
those anticipated. These forward-looking statements include without limitation
any projections or guidance relating to the results of operations and
financial conditions of the group as well as plans and objectives for future
operations, expected future revenues, financing plans, expected expenditure
and any strategic initiatives relating to the group, as well as discussions of
our business plan and our assumptions, expectations, objectives and resilience
with respect to climate scenarios. The forward-looking statements reflect
knowledge and information available at the date of preparation of this
financial report and the company undertakes no obligation to update these
forward-looking statements. Nothing in this financial report should be
construed as a profit forecast.
Certain regulatory performance data contained in this financial report is
subject to regulatory audit.
This announcement contains inside information, disclosed in accordance with
the Market Abuse Regulation which came into effect on 3 July 2016 and for UK
Regulatory purposes the person responsible for making the announcement is
Simon Gardiner, Company Secretary.
LEI 2138002IEYQAOC88ZJ59
Classification - Half Year Result
Consolidated income statement
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Revenue (note 3) 1,309.2 1,082.0 2,145.2
Other income 13.2 8.8 17.5
Staff costs (125.4) (107.7) (224.1)
Other operating costs (note 4) (357.9) (303.3) (630.6)
Allowance for expected credit losses - trade and other receivables (16.7) (12.3) (20.5)
Depreciation of property, plant and equipment (227.5) (224.3) (435.7)
Amortisation of intangible assets (14.7) (16.2) (29.2)
Infrastructure renewals expenditure (18.7) (93.6) (191.1)
Total operating expenses (747.7) (748.6) (1,513.7)
Operating profit 561.5 333.4 631.5
Investment income (note 5) 47.5 51.7 106.2
Finance expense (note 6) (280.2) (245.1) (371.9)
Investment income and finance expense (232.7) (193.4) (265.7)
Share of (losses)/profits of joint ventures (note 10) (3.5) 0.6 (10.8)
Profit before tax 325.3 140.6 355.0
Current tax charge (1.1) - (0.4)
Deferred tax charge (84.2) (37.5) (89.9)
Tax (note 7) (85.3) (37.5) (90.3)
Profit after tax 240.0 103.1 264.7
Earnings per share (note 8)
Basic 35.2p 15.1p 38.8p
Diluted 35.1p 15.1p 38.7p
Dividend per ordinary share (note 9) 17.88p 17.28p 51.85p
All of the results shown above relate to continuing operations.
Consolidated statement of comprehensive income
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Profit after tax 240.0 103.1 264.7
Other comprehensive income
Items that may be reclassified to profit or loss in subsequent periods:
Cash flow hedges - effective portion of fair value movements (4.9) 1.9 8.6
Tax on items that may be reclassified to profit or loss 1.2 (0.5) (2.2)
Reclassification of items recorded in other comprehensive income to profit or 10.5 2.6 (1.3)
loss
Tax reclassified to income statement (2.6) (0.6) 0.3
4.2 3.4 5.4
(17.9) 8.6 18.6
Items that will not be reclassified to profit or loss in subsequent periods:
Remeasurement (losses)/gains on defined benefit pension
schemes (note 11)
Change in credit assumptions for debt reported at fair value through profit or (4.1) (0.6) 1.9
loss
Cost of hedging - cross currency basis spread adjustment 4.5 (1.5) 3.6
Tax on items taken directly to equity 3.8 (1.7) (6.0)
(13.7) 4.8 18.1
Total comprehensive income 230.5 111.3 288.2
Consolidated statement of financial position
30 September 31 March 30 September
2025 2025 2024
£m £m £m
ASSETS
Non-current assets
Property, plant and equipment 14,323.6 13,873.0 13,383.3
Intangible assets 97.4 105.8 115.8
Interests in joint ventures (note 10) - 1.6 13.0
Trade and other receivables 54.3 73.6 72.4
Retirement benefit surplus (note 11) 292.8 302.3 284.2
Derivative financial instruments 343.1 329.3 319.8
15,111.2 14,685.6 14,188.5
Current assets
Inventories - properties held for resale 2.8 2.7 2.9
Inventories - other 7.2 21.9 19.2
Trade and other receivables 374.6 282.0 325.0
Current tax asset 92.0 93.3 93.8
Cash and cash equivalents (note 12) 1,480.7 1,672.6 1,084.9
Bank deposits (note 12) 455.0 - 728.2
Derivative financial instruments 5.6 11.4 14.3
2,417.9 2,083.9 2,268.3
Total assets 17,529.1 16,769.5 16,456.8
LIABILITIES
Non-current liabilities
Trade and other payables (1,125.9) (1,063.8) (1,026.1)
Borrowings (note 13) (10,956.1) (10,326.5) (10,001.2)
Deferred tax liabilities (2,110.2) (2,028.4) (1,970.9)
Derivative financial instruments (255.3) (275.0) (251.1)
(14,447.4) (13,693.7) (13,249.3)
Current liabilities
Trade and other payables (629.8) (577.2) (534.8)
Borrowings (note 13) (421.7) (462.1) (696.7)
Provisions (17.6) (19.0) (19.2)
Derivative financial instruments (20.5) (17.6) (18.4)
(1,089.6) (1,075.9) (1,269.1)
Total liabilities (15,537.0) (14,769.6) (14,518.4)
Total net assets 1,992.1 1,999.9 1,938.4
EQUITY
Share capital 499.8 499.8 499.8
Share premium account 2.9 2.9 2.9
Other reserves (note 17) 326.8 319.2 313.4
Retained earnings 1,162.6 1,178.0 1,122.3
Shareholders' equity 1,992.1 1,999.9 1,938.4
Consolidated statement of changes in equity
Six months ended 30 September 2025
Share Share Retained Total
capital Premium ((1))Other Earnings £m
£m account reserves £m
£m £m
At 1 April 2025 499.8 2.9 319.2 1,178.0 1,999.9
Profit after tax - - - 240.0 240.0
Other comprehensive income/(expense)
Remeasurement losses on defined benefit pension schemes (note 11)
- - - (17.9) (17.9)
Change in credit assumption for debt reported at fair value through profit or
loss
- - - (4.1) (4.1)
Cash flow hedges - effective portion of fair value movements (4.9)
- - (4.9) -
Cost of hedging - cross-currency basis spread adjustment - - 4.5 - 4.5
Tax on items recorded in other comprehensive income - - 0.1 4.9 5.0
Reclassification of items recorded in other comprehensive income to profit or - - 10.5 - 10.5
loss
Tax reclassified to income statement - - (2.6) - (2.6)
Total comprehensive income - - 7.6 222.9 230.5
Dividends (note 9) - - - (235.7) (235.7)
Equity-settled share-based payments - - - 1.1 1.1
Purchase of shares to satisfy exercise of share options - - - (4.1) (4.1)
Proceeds from share forfeitures - - - 0.4 0.4
At 30 September 2025 499.8 2.9 326.8 1,162.6 1,992.1
Six months ended 30 September 2024
Share capital Share premium account Retained earnings Total
£m £m ((1))Other £m £m
reserves
£m
At 1 April 2024 499.8 2.9 311.1 1,242.3 2,056.1
Profit after tax - - - 103.1 103.1
Other comprehensive income/(expense)
Remeasurement gains on defined benefit pension schemes (note 11)
- - - 8.6 8.6
Change in credit assumption for debt reported at fair value through profit or
loss
- - - (0.6) (0.6)
Cash flow hedges - effective portion of fair value movements
- - 1.9 - 1.9
Cost of hedging - cross-currency basis spread adjustment - - (1.5) - (1.5)
Tax on items recorded in other comprehensive income - - (0.1) (2.1) (2.2)
Reclassification of items recorded in other comprehensive income to profit or - - 2.6 - 2.6
loss
Tax reclassified to income statement - - (0.6) - (0.6)
Total comprehensive income - - 2.3 109.0 111.3
Dividends (note 9) - - - (226.3) (226.3)
Equity-settled share-based payments - - - 2.3 2.3
Purchase of shares to satisfy exercise of share options - - - (5.0) (5.0)
At 30 September 2024 499.8 2.9 313.4 1,122.3 1,938.4
Year ended 31 March 2025
Share capital Share premium account Retained earnings Total
£m £m ((1))Other £m £m
reserves
£m
At 1 April 2024 499.8 2.9 311.1 1,242.3 2,056.1
Profit after tax - - - 264.7 264.7
Other comprehensive income/(expense)
Remeasurement gains on defined benefit pension schemes (note 11)
- - - 18.6 18.6
Change in credit assumption for debt reported at fair value through profit or
loss
- - - 1.9 1.9
Cash flow hedges - effective portion of fair value movements
- - 8.6 - 8.6
Cost of hedging - cross-currency basis spread adjustment - - 3.6 - 3.6
Tax on items recorded in other comprehensive income - - (3.1) (5.1) (8.2)
Reclassification of items recorded in other comprehensive income to profit or - - (1.3) - (1.3)
loss
Tax reclassified to income statement - - 0.3 - 0.3
Total comprehensive income - - 8.1 280.1 288.2
Dividends (note 9) - - - (344.1) (344.1)
Equity-settled share-based payments - - - 4.7 4.7
Purchase of shares to satisfy exercise of share options - - - (5.0) (5.0)
At 31 March 2025 499.8 2.9 319.2 1,178.0 1,999.9
((1) ) Other reserves comprise the group's capital redemption
reserve, merger reserve, cost of hedging reserve, and cash flow hedging
reserve. Further detail of movements in these reserves is included in note 17.
Consolidated statement of cash flows
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Operating activities
Cash generated from operations (note 15) 807.0 550.8 1,082.7
Interest paid (155.8) (113.9) (263.5)
Interest received and similar income 35.1 30.0 92.5
Tax paid - (0.1) (0.1)
Tax received 0.2 6.5 6.5
Net cash generated from operating activities 686.5 473.3 918.1
Investing activities
Purchase of property, plant and equipment (637.5) (436.0) (988.5)
Proceeds from disposal of property, plant and equipment 0.7 0.7 1.1
Purchase of intangible assets (6.2) (6.8) (9.5)
Grants and contributions received 23.8 1.0 9.2
Loans repaid by joint ventures 17.5 1.5 0.5
Placement of deposits with maturity greater than three months (note 12) (455.0) (768.7) (768.7)
Receipt of deposits with maturity greater than three months (note 12) - 768.7
40.5
Net cash used in investing activities (1,056.7) (1,167.8) (987.2)
Financing activities
Proceeds from borrowings net of issuance costs 520.8 685.1 1,339.3
Repayment of borrowings (99.5) (64.1) (631.4)
Dividends paid to equity holders of the company (note 9) (235.7) (344.1)
(226.3)
Purchase of shares to satisfy exercise of share options (4.1) (5.0) (5.0)
Proceeds from share forfeitures 0.4 - -
Net cash generated from financing activities 181.9 389.7 358.8
Net (decrease)/increase in cash and cash equivalents 289.7
(188.3) (304.8)
Cash and cash equivalents at beginning of the period 1,669.0 1,379.3 1,379.3
Cash and cash equivalents at end of the period 1,480.7 1,074.5 1,669.0
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. Basis of preparation and accounting policies
The condensed consolidated financial statements for the six months ended 30
September 2025 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and International
Accounting Standard 34 'Interim Financial Reporting' (IAS 34) as published by
the International Accounting Standards Board ('IASB') and adopted by the UK.
The condensed consolidated financial statements do not include all of the
information and disclosures required for full annual financial statements, do
not comprise statutory accounts within the meaning of section 434 of the
Companies Act 2006, and should be read in conjunction with the group's annual
report and financial statements for the year ended 31 March 2025.
The comparative figures for the year ended 31 March 2025 do not comprise the
group's statutory accounts for that financial year. Those accounts have been
reported upon by the group's auditor and delivered to the registrar of
companies. The report of the auditor was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
The annual financial statements for the year ended 31 March 2025 were prepared
in accordance with the requirements of the Companies Act 2006, and with
UK-adopted international accounting standards. They were prepared on the going
concern basis under the historical cost convention, except for the revaluation
of financial instruments, accounting for the transfer of assets from customers
and the revaluation of infrastructure assets to fair value on transition to
IFRS.
Except as documented below with regards to the presentation of financial
liabilities that had not settled at the reporting date, the accounting
policies, presentation and methods of computation used in these condensed
consolidated interim financial statements are the same as those used in the
audited financial statement of United Utilities Group PLC for the year ended
31 March 2025.
Capitalisation of Infrastructure Renewals Expenditure ('IRE')
All Infrastructure Renewal Expenditure ('IRE'), being expenditure incurred in
maintaining the operating capability of the group's water and wastewater
infrastructure network assets in accordance with defined standards of service,
has historically been recognised as an expense in the income statement in the
year in which the expenditure is incurred. This historic treatment was based
on viewing such expenditure as comprising repairs or servicing of the network
infrastructure as a whole. However, developments in the availability and
granularity of asset data, along with advances in data analytic capabilities,
means that IRE activities can now be identified at the individual component
level. Therefore, to the extent that IRE includes expenditure on the
replacement of assets and the recognition criteria of IAS 16 'Property, Plant
and Equipment' are met at the component level, the cost of the replacement
part is now capitalised as part of the cost of the infrastructure asset, with
the carrying value of the component that has been replaced being
simultaneously derecognised. IRE activities that do not result in an asset
replacement continue to be expensed as incurred.
This change in approach reflects a change in the application of judgement as
to the level at which assets can be recognised and derecognised within the
scope of the group's existing accounting policies for property, plant and
equipment. It is not considered to be a change in accounting policy as defined
within IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors', and therefore this change in accounting has been applied
prospectively from 1 April 2025 with no restatement of prior year information.
This has resulted in IRE additions of £96.7 million within Property, Plant
and Equipment during the six months to 30 September 2025 that would previously
have been expensed in the period.
Adoption of new and revised standards
There were no new standards, interpretations or amendments, effective for the
six months ended 30 September 2025, that had a material impact on the group's
financial statements, or that were not early adopted in previous years.
Amendments to the Classification and Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7)
In May 2024, the IASB published amendments relating to the classification and
measurement of financial instruments. These amendments are effective for
reporting periods beginning on or after 1 January 2026 with early adoption
permitted. The amendments most relevant to the group allow for an accounting
policy choice to derecognise certain financial liabilities settled using an
electronic payment system before the settlement date, where the electronic
payment system meets specific criteria.
This accounting policy choice has not been adopted within the group financial
statements. Financial liabilities continue to be derecognised upon settlement,
rather than initiation, of electronic payments, which reflects operational
management of the group's liquidity position. Management has, however, amended
the presentation of these financial liabilities which had not settled at the
reporting date. Previously these balances were presented as 'book overdrafts'
within current borrowings, however these have been prospectively recognised
within trade and other payables, reflecting that it is the financial liability
to the creditor, rather than the clearing bank, that has not been extinguished
at the reporting date. Prior year comparatives are not material and
accordingly have not been re-presented.
Going concern
The interim condensed consolidated financial statements for the six months
ended 30 September 2025 have been prepared on the going concern basis as the
directors have a reasonable expectation that the group has adequate resources
for a period of at least 12 months from the date of their approval, and that
there are no material uncertainties to disclose.
In assessing the appropriateness of the going concern basis of accounting, the
directors have reviewed the resources available to the group in the form of
cash and committed bank facilities, as well as considering the group's capital
adequacy, along with a baseline plan reflecting current best estimate of
forecasted future business performance. The directors have considered the
magnitude of potential impacts resulting from events and changes in conditions
since the authorisation of the prior period financial statements and uncertain
future events or changes in conditions in forming this assessment.
Consequently, the directors are satisfied that the group will have sufficient
funds to continue to meet its liabilities as they fall due for at least 12
months from the date of approval of the interim condensed consolidated
financial statements, and that liquidity forecasts indicate that the group
will be able to operate within the amounts and terms (including relevant
covenants) of existing facilities. The interim condensed consolidated
financial statements have therefore been prepared on a going concern basis.
Update on critical accounting judgements and key sources of estimation
uncertainty
The duration and impact of ongoing uncertainty and challenges associated with
the current economic environment remains unclear. Whilst the impact of
inflationary pressures has fallen from previous peaks, inflation is higher
than the recent average and remains above the Bank of England target. Interest
rates also continue to be higher on average than observed over previous years,
further contributing to cost of living pressures. The group remains mindful of
the possible impact on affordability of the increase in allowed revenue which
will see an increase customer bills.
Critical accounting judgements and key sources of estimation uncertainty have
been kept under review during the period to 30 September 2025. The group
considers the estimate most likely to be impacted by ongoing developments
relates to the group's allowance for expected credit losses in respect of
household receivables.
Accounting estimate - allowance for expected credit losses in respect of
household trade receivables:
Overall cash collection in the year to date has been broadly in line with
forecasts and prior year performance. A range of collection scenarios have
been used to inform the allowance for expected credit losses charged to the
income statement during the period.
In determining this allowance, the group continues to model a three-year
average of cash collection to validate the provisioning rates used as this
normalises collection performance for factors that occur over a longer period
of time.
Provisioning rates are informed by recent cash collection performance as an
indicator of future expected credit loss and are subject to ongoing monitoring
to assess the sufficiency of these rates across a range of scenarios. These
provisioning rates support a charge equivalent to around 1.8 per cent of
household revenue recorded during the period, which is slightly higher than
the position of 1.5 per cent at 31 March 2025, although generally consistent
once the effect of a management overlay released in the prior year is stripped
out. Following the release of this overlay, the expected credit loss is
assessed based solely on the provisioning rates.
Additional collection data gathered over the second half of the year will be
used to develop the assumptions made in determining the year end allowance for
expected credit losses.
2. Segmental reporting
The board of directors of United Utilities Group PLC is provided with
information on a single operating segment basis for the purposes of assessing
performance and allocating resources. The group's performance is measured
against financial and operational key performance indicators, underlying
operating profit, operating profit, assets and liabilities, regulatory capital
expenditure, and regulatory capital value gearing at a consolidated level. In
light of this, the group has a single segment for financial reporting purposes
and therefore no further detailed segmental information is provided in this
note.
3. Revenue
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Wholesale water charges 536.0 450.1 897.7
Wholesale wastewater charges 681.7 559.1 1,113.7
Household retail charges 69.0 49.3 90.5
Other 22.5 23.5 43.3
1,309.2 1,082.0 2,145.2
The £227.2 million increase in revenue for the half year ended 30 September
2025 compared with the prior half year is largely attributable to increases in
tariff prices, which have been impacted by the allowed inflationary increase
and the impact of regulatory mechanisms under which prices are set for the
current year to recover revenue in line with the revenue cap, taking into
account the latest consumption trends and customer numbers.
Other revenues comprise a number of smaller non-core income streams including
property sales and income from activities, typically performed opposite
property developers, which impact the group's capital network assets. This
includes diversions works to relocate water and wastewater assets, and
activities that facilitate the creation of an authorised connection through
which properties can obtain water and wastewater services.
4. Other operating costs
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Power 86.1 73.0 154.5
Materials 84.8 69.0 144.1
Hired and contracted services 77.1 57.8 133.5
Property rates 47.9 47.6 89.9
Regulatory fees 26.0 21.0 44.8
Accrued innovation costs 7.2 4.3 8.0
Insurance 6.0 11.8 14.5
Loss on disposal of property, plant and equipment 0.5 2.9 4.0
Other expenses 22.3 15.9 37.3
357.9 303.3 630.6
Other operating costs for the six months to 30 September 2025 have increased
by around £55 million compared with the same period in the prior year. This
largely reflects price impacts resulting from inflationary pressures, higher
regulatory fees, and costs associated with growth in the group's underlying
asset base, as well as higher costs incurred in ensuring that the group's
network has remained resilient and that supply has been safeguarded in what
has been a particularly dry period.
5. Investment income
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Interest receivable 38.8 45.3 93.3
Net pension interest income (note 11) 8.7 6.4 12.9
47.5 51.7 106.2
6. Finance expense
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Interest 227.6 193.5 372.3
payable
Net fair value losses/(gains) on debt and derivatives 52.6 51.6 (0.4)
280.2 245.1 371.9
Interest payable is stated net of £45.7 million (30 September 2024: £31.0
million; 31 March 2025: £68.5 million) of borrowing costs capitalised in the
cost of qualifying assets within property, plant and equipment and intangible
assets during the period. Interest payable includes £111.6 million (30
September 2024: £82.3 million; 31 March 2025: £142.2 million) non-cash
inflation expense in relation to the group's index-linked debt.
Net fair value losses/(gains) on debt and derivative instruments includes
£0.3 million income (30 September 2024: £0.8 million expense; 31 March 2025:
£1.3 million income) due to net interest on derivatives and debt held under
fair value option, and £17.2 million expense (30 September 2024: £10.8
million expense; 31 March 2025: £19.6 million expense) due to non-cash
inflation uplift on the group's index-linked derivatives.
7. Tax
The total effective tax rate for the six months to 30 September 2025 was 26
per cent, compared to 27 per cent at the previous half year.
The split of the total tax charge between current and deferred tax was due to
ongoing timing differences in relation to tax deductions on capital investment
and unrealised gains and losses on treasury derivatives.
The current tax charge of £1.1 million for the six months to 30 September
2025 reflects an adjustment to management's estimate of the most likely amount
that will be received in relation to Research and Development allowances
available on certain capital projects that remain under enquiry and are yet to
be agreed with tax authorities. Except for this, the current tax charge for
the period would have been nil, mainly reflecting the impact of the capital
allowances "first year allowances" affecting our eligible plant and machinery
additions.
The current tax asset recognised in the statement of financial position
reflects the amount of tax expected to be recoverable based on judgements made
regarding the application of tax law, and the current status of negotiations
with, and enquiries from, tax authorities.
The tax adjustments taken to equity primarily relate to remeasurement
movements on the group's defined benefit pension schemes and on hedging
effectiveness.
8. Earnings per share
Basic and diluted earnings per share are calculated by dividing profit after
tax by the weighted average number of shares in issue during the period.
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Profit after tax attributable to equity holders of the company 240.0 103.1 264.7
Weighted average number of shares in issue in millions
Basic 681.9 681.9 681.9
Diluted 683.6 683.4 683.6
Earnings per share in pence
Basic 35.2 15.1 38.8
Diluted 35.1 15.1 38.7
In accordance with IAS 33 'Earnings per share', when potential ordinary shares
increase earnings per share, or decrease loss per share upon their conversion
to ordinary shares, they are considered antidilutive. Antidilutive potential
ordinary shares are therefore excluded from the calculation of diluted
earnings per share.
9. Dividends
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Dividends relating to the period comprise:
Interim dividend 121.9 117.8 117.8
Final dividend - - 235.7
( ) 121.9 117.8 353.5
Dividends deducted from shareholders' equity comprise:
Interim dividend - - 117.8
Final dividend 235.7 226.3 226.3
( ) 235.7 226.3 344.1
The interim dividends for the six months ended 30 September 2025 and 30
September 2024, and the final dividend for the year ended 31 March 2025, have
not been included as liabilities in the respective condensed consolidated
financial statements at 30 September 2025 and 30 September 2024, and the
consolidated financial statements at 31 March 2025, because they were approved
after the reporting date.
The interim dividend of 17.88 pence per ordinary share (year ended 31 March
2025: interim dividend of 17.28 pence per ordinary share, final dividend of
34.57 pence per ordinary share) is expected to be paid on 12 January 2026 to
shareholders on the register at the close of business on 19 December 2025. The
ex-dividend date for the interim dividend is 18 December 2025.
10. Interests in joint ventures
Six months ended Year ended Six months ended
30 September 31 March 30 September
2025 2025 2024
£m £m £m
Joint ventures at the start of the period 1.6 12.4 12.4
Share of (losses)/profits of joint ventures (3.5) (10.8) 0.6
Less: Share of losses allocated to other components 1.9 - -
of long-term interest in joint ventures
Joint ventures at the end of the period - 1.6 13.0
The group's interests in joint ventures mainly comprises its 50 per cent
interest in Water Plus Group Limited ('Water Plus'), which is jointly owned
and controlled by the group and Severn Trent PLC under a joint venture
agreement.
The group's total share of Water Plus losses for the half year was £3.5
million (six months to 30 September 2024: £0.6 million share of profits; year
to 31 March 2025: £10.8 million share of losses), all of which is recognised
in the income statement.
As at 30 September 2025 Water Plus had net liabilities of £22.8 million based
on the best information available at the time the group's interim financial
statements are approved, with the group's share of this being £11.4 million
(50 per cent). Of the total historic share of Water Plus results giving rise
to this position, losses of £11.4 million have been allocated against
zero-coupon loan notes extended to Water Plus (see note 20), which are deemed
to be a long-term interest that, in substance, forms part of the group's net
investment in Water Plus.
Details of transactions between the group and its joint ventures are disclosed
in note 20.
11. Retirement benefit surplus
The main financial assumptions used by the group's actuary to calculate the
defined benefit surplus of the United Utilities Pension Scheme ('UUPS') and
the United Utilities PLC Group of the Electricity Supply Pension Scheme
('ESPS') were as follows:
30 September 31 March 30 September
2025 2025 2024
% p.a. % p.a. % p.a.
Discount rate 5.80 5.70 5.00
Pension increases 3.00 3.20 3.15
Pensionable salary growth (pre-1 April 2018 service):
ESPS 3.00 3.20 3.15
UUPS 3.00 3.20 3.15
Pensionable salary growth (post-1 April 2018 service):
ESPS 3.00 3.20 3.15
UUPS 2.60 2.75 2.70
Price inflation - RPI 3.00 3.20 3.15
Price inflation - CPI((1)) 2.60 2.75 2.70
(1) The CPI price inflation assumption represents a single weighted average
rate derived from an assumption of 2.10 per cent pre-2030 and 2.80 per cent
post-2030.
As at 30 September 2025 corporate bond yields have increased relative to 31
March 2025, leading to a higher IAS 19 discount rate. As the schemes are more
than 100% hedged on an IAS 19 basis, the uninsured assets have fallen more
than the Defined Benefit Obligation ('DBO'). Credit spreads have widened
slightly since the year end, which, all else being equal, decreases the DBO by
more than the value of the assets as the assets are less exposed to changes in
corporate bond spreads than the DBO. Inflation has fallen since the assumption
made at the previous year end. Finally, demographic assumptions are generally
consistent with those at the previous year end.
The discount rate is consistent with a high quality corporate bond rate, with
5.80 per cent being equivalent to gilts + 50bps credit spread (30 September
2024: 5.00 per cent being equivalent to gilts + 60bps credit spread; 31 March
2025: 5.70 per cent being equivalent to gilts + 60bps).
Mortality assumptions are based on adjusted SAPS 4 CMI2024 base tables
inclusive of a 1.25% p.a. rate of improvement, initial adjustment (A)
parameter of 0.25%, a "half-life" (H) parameter of 1, and an adjustment to the
"advanced parameters" to model lower improvements in life expectancy at older
ages than the core model. The impact of the update to the mortality
assumptions resulted in an actuarial loss of around £8 million.
The net pension income before tax in the income statement in respect of the
defined benefit schemes is summarised as follows:
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Current service cost 1.3 1.2 2.5
Past service cost 0.1 - -
Administrative expenses 1.7 2.4 4.0
Pension expense charged to operating profit 3.1 3.6 6.5
Net pension interest income credited to investment income (note 5) (8.7) (6.4) (12.9)
Net pension income credited to the income statement before tax (5.6) (2.8) (6.4)
The reconciliation of the opening and closing net pension surplus included in
the statement of financial position is as follows:
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2025 2025
£m £m £m
At the start of the period 302.3 268.0 268.0
Income recognised in the income statement 5.6 2.8 6.4
Employer contributions 2.8 4.8 9.3
Remeasurement (losses)/gains gross of tax (17.9) 8.6 18.6
At the end of the period 292.8 284.2 302.3
The closing surplus at each reporting date is analysed as follows:
30 September 31 March 30 September
2025 2025 2024
£m £m £m
Fair value of schemes' assets 2,278.1 2,308.6 2,479.4
Present value of defined benefit obligations (1,985.3) (2,006.3) (2,195.2)
Net retirement benefit surplus 292.8 302.3 284.2
The c£10 million decrease in the estimated IAS 19 surplus from 31 March 2025
is driven by an actuarial loss over the period of £18 million, partially
offset by a net P&L credit of £6 million and employer contributions of
£3 million. The actuarial loss arises due to the increase in gilt yields
which reduces the asset values by more than the DBO, actual inflation in the
period being higher than expected and overall life expectancies being slightly
higher than assumed at the previous year-end. This is partially offset by the
increase in the discount rate and a decrease in the long-term average RPI
assumption which both act to place a lower value on the defined benefit
obligation.
The latest finalised funding valuation was carried out as at 31 March 2024 and
determined that the schemes were fully funded on a low-dependency basis
without any funding deficit that requires additional contributions from the
company over and above those related to current service and expenses.
The results of the latest funding valuation at 31 March 2024 have been used to
inform the group's best estimate assumptions to use in calculating the defined
benefit pension position reported on an IAS 19 basis at 30 September 2025. The
results of the funding valuation have been adjusted to take account of
experience over the period, changes in market conditions, and differences in
the financial and demographic assumptions. The present value of the defined
benefit obligation, and the related current service costs, were measured using
the projected unit credit method.
Member data used in arriving at the liability figure included within the
overall IAS 19 surplus has been based on the finalised actuarial valuations as
at 31 March 2024 for both UUPS and ESPS. As part of each actuarial valuation
and, more frequently, as required by the trustees, member data is reassessed
for completeness and accuracy and to ensure it reflects any relevant changes
to benefits entitled by each member.
Virgin Media High Court decision
In June 2023, the High Court handed down a decision in the case of Virgin
Media Limited v NTL Pension Trustees II Limited and others relating to the
validity of certain historical pension changes due to the lack of actuarial
confirmation required by law. On 2 September 2025, the Government published
draft amendments to the Pensions Scheme Bill which would give affected pension
schemes the ability to retrospectively obtain written actuarial confirmation
that historic benefit changes met the necessary standards. The draft
legislation will need to be agreed by both Houses of Parliament before it
passes into law.
Following the publication of draft legislation, the Directors do not expect
the Virgin Media ruling to give rise to any additional liabilities. The
present value of defined benefit obligations has not been adjusted and
continues to reflect the benefits currently being administered.
Defined contribution schemes
During the period the group made £18.5 million (30 September 2024: £15.9
million; 31 March 2025: £36.7 million) of contributions to defined
contribution schemes, which are included in staff costs.
12. Cash and bank deposits
30 September 31 March 30 September
2025 2025 2024
£m £m £m
( )
Cash at bank and in hand 1.8 4.2 3.6
Bank deposits with maturity less than three months 1,478.9 1,668.4 1,081.3
Cash and short-term deposits 1,480.7 1,672.6 1,084.9
- (3.6) (10.4)
Book overdrafts
Cash and cash equivalents - statement of cash flows 1,480.7 1,669.0 1,074.5
30 September 31 March 30 September
2025 2025 2024
£m £m £m
( )
Bank deposits with maturity greater than three months 455.0 - 728.2
Cash and short-term deposits, whose carrying amounts approximate their fair
value, includes cash at bank and in hand and demand deposits, as well as
short-term highly liquid investments that are readily convertible into known
amounts of cash and have a maturity of three months or less.
During the six month periods ended 30 September 2025 and 30 September 2024 the
group entered into a number of bank deposits with scheduled maturities before
the end of the relevant financial year but more than three months from the
placement date. As these deposits are not held for the purpose of meeting
short-term cash commitments (i.e. arising within three months), they do not
meet the definition of cash equivalents and so have been excluded from the
cash and cash equivalents figure included in the statement of cash flows. They
do, however, represent deposits expected to be realised within the financial
year in which they were placed and so are included in the calculation of the
group's net debt (see note 16).
Book overdrafts in prior periods comprised the value of cheques issued and
payments initiated before the reporting date but which had not yet settled
through the bank statement as at the reporting date. In accordance with the
change in the accounting presentation, as explained further in the Basis of
Preparation, these balances are instead reclassified to trade and other
payables and are therefore not a deduction from cash at bank and in hand at
the reporting date. This change is made on a prospective basis and hence prior
periods have not been re-presented.
13. Borrowings
New borrowings raised during the 6 months ended 30 September 2025, all of
which were issued under the Euro Medium-Term Note Programme, were as follows:
● On 7 August 2025, the group issued EUR500 million fixed rate notes, due August
2035. On issue, the EUR bond was immediately swapped to £432.5 million of
principal outstanding.
● On 25 September 2025, the group issued EUR100 million fixed rate notes as a
fungible increase to the EUR650m notes, due May 2034. On issue, the EUR bond
was immediately swapped to £86.8 million of principal outstanding.
On 28 October 2025, the group executed a term loan facility for £100 million,
for a five-year term (with two extension options of one year each). This loan
was drawn down on 10 November 2025, and as such it does not form part of the
borrowings balance at 30 September 2025.
During the six months ended 30 September 2025, extensions to four existing
undrawn committed borrowing facilities were approved, with amounts available
under these facilities totalling £150 million. There was a further £25
million increase to one facility, and a £100 million decrease to one facility
during the period.
Borrowings at 30 September 2025 include £84.2 million in relation to lease
liabilities (30 September 2024: £68.0 million; 31 March 2025: £83.2
million), of which £78.9 million (30 September 2024: £64.9 million; 31 March
2025: £78.0 million) was classified as non-current and £5.3 million (30
September 2024: £3.1 million; 31 March 2025: £5.2 million) was classified as
current.
As at 30 September 2025, there were £823 million of borrowings with a single
counterparty that are subject to compliance with financial covenants in
respect of the level of gearing and interest cover of United Utilities Water
Limited, a subsidiary of the group. Compliance with these covenants is
monitored by the group on a quarterly basis and reported to the counterparty
annually. The group was compliant with these financial covenants at the
reporting date.
14. Fair values of financial instruments
The fair values (FV) of financial instruments are shown in the table below.
30 September 2025 31 March 2025 30 September 2024
Fair Carrying value Fair Carrying value Fair Carrying value
value £m value £m value £m
£m £m £m
Financial assets at fair value through profit or loss
(FVTPL)
Derivative financial assets - FV hedge 99.8 99.8 43.3 43.3 70.9 70.6
Derivative financial assets - held for trading 247.9 247.9 295.7 295.7 255.6 255.6
Derivative financial assets - cash flow hedge 1.0 1.0 1.7 1.7 7.9 7.9
Financial liabilities at fair value through profit or loss (FVTPL)
Derivative financial liabilities - FV hedge (212.5) (212.5) (245.9) (245.9) (213.0) (213.0)
Derivative financial liabilities - held for trading (40.1) (40.1) (17.6) (17.6) (18.5) (18.5)
Derivative financial liabilities - cash flow hedge (23.2) (23.2) (29.1) (29.1) (38.0) (38.0)
Financial liabilities designated at FVTPL (321.0) (321.0) (330.2) (330.2) (327.1) (327.1)
Financial instruments for which fair value does not approximate carrying value
Financial liabilities in FV hedge relationships (4,472.6) (4,380.5) (3,816.8) (3,797.2) (3,564.9) (3,563.8)
Other financial liabilities at amortised cost (5,892.3) (6,676.6) (5,833.7) (6,661.2) (6,190.6) (6,807.0)
(10,613.0) (11,305.2) (9,932.6) (10,740.5) (10,018.0) (10,633.3)
The group has calculated fair values using quoted prices where an active
market exists, which has resulted in 'level 1' fair value liability
measurements under the IFRS 13 'Fair Value Measurement' hierarchy of £4,043.7
million (30 September 2024: £3,353.8 million; 31 March 2025: £3,447.9
million) for financial liabilities in fair value hedge relationships, and
£1,942.7 million (30 September 2024: £2,899.2 million; 31 March 2025:
£2,171.1 million) for other financial liabilities at amortised cost.
The £367.4 million increase in 'level 1' fair value liability measurements
compared with the position at 31 March 2025 (30 September 2024: £521.1
million increase compared with 31 March 2024; 31 March 2025: £112.9 million
decrease compared with 31 March 2024) primarily reflects debt issuances in the
year to date.
In the absence of an appropriate quoted price, the group has applied
discounted cash flow valuation models utilising market available data, which
are classified as 'level 2' valuations. More information in relation to the
valuation techniques used by the group and the IFRS 13 hierarchy can be found
in the audited financial statements of United Utilities Group PLC for the year
ended 31 March 2025.
The principal reason for the decrease in the difference between the fair value
and carrying value of the group's borrowings at 30 September 2025 compared
with the position at 31 March 2025 is due to a tightening of credit spreads.
15. Cash generated from operations
Six months ended Six months ended Year ended
31 March
30 September 30 September
2025
2025 2024
£m
£m £m
Operating profit 561.5 333.4 631.5
Adjustments for:
Depreciation of property, plant and equipment 227.5 224.3 435.7
Amortisation of intangible assets 14.7 16.2 29.2
Loss on disposal of property, plant and equipment 0.5 2.9 4.0
Amortisation of deferred grants and contributions (10.1) (10.1) (19.8)
Equity-settled share-based payments charge 1.1 2.3 4.7
Pension expense charged to operating profit less Pension contributions paid 0.3 (1.2) (3.0)
Changes in working capital:
Decrease/(Increase) in inventories 14.8 (0.6) (3.1)
Increase in trade and other receivables (89.4) (84.9) (54.7)
Increase in trade and other payables 87.5 62.8 52.7
(Decrease)/Increase in provisions (1.4) 5.7 5.5
Cash generated from operations 807.0 550.8 1,082.7
16. Net debt
Movements in net debt during the period were as follows:
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
At the start of the period 9,345.5 8,762.7 8,762.7
Net capital expenditure 619.2 441.1 987.8
Dividends (note 9) 235.7 226.3 344.1
Interest 120.7 83.9 171.0
Indexation (note 6) 128.8 93.1 161.7
Exchange rate movement on bonds and term borrowings 46.3 (38.6) (13.2)
Net tax receipt (0.2) (6.4) (6.5)
Non-cash movements in lease liabilities 2.4 8.7 27.2
Repayment of loans by joint ventures (17.5) (1.5) (0.5)
Other 5.2 5.5 14.7
Fair value movements (69.3) 26.5 (20.8)
Cash generated from operations (note 15) (807.0) (550.8) (1,082.7)
At the end of the period 9,609.8 9,050.5 9,345.5
Movements in net debt during the period are impacted by net cash generated
from financing activities as disclosed in the consolidated statement of cash
flows.
Net debt at the end of each period comprised:
30 September 31 March 30 September
2025 2025 2024
£m £m £m
Borrowings 11,377.8 10,788.6 10,697.9
Derivative financial instruments (liabilities) 275.8 292.6 269.5
Derivative financial instruments (assets) (348.7) (340.7) (334.1)
Cash and cash equivalents (see note 12) (1,480.7) (1,672.6) (1,084.9)
Bank deposits (see note 12) (455.0) - (728.2)
Net debt - as agreed to statement of financial position 9,369.2 9,067.9 8,820.2
Adjustments to exclude the fair value of:
Interest rate derivatives fixing future nominal interest rates 143.2 178.0 136.4
Inflation derivatives fixing future real interest rates 119.3 126.9 124.1
Electricity derivatives fixing future electricity costs (21.9) (27.3) (30.2)
Net debt - as adjusted to align to the group's definition 9,609.8 9,345.5 9,050.5
The group defines net debt as the sum of borrowings and derivative financial
instruments, net of cash and bank deposits, and adjusted to exclude the value
of derivatives that are not hedging specific debt instruments. In presenting
net debt in this way, the group aims to give a fair reflection of the net debt
amount the group is contractually obliged to repay - consistent with the
approach taken by credit rating agencies - and the regulatory economics of the
group's arrangements. As the value of derivatives that are not hedging
specific debt instruments is excluded from the group's definition of net debt,
fair value movements associated with these derivatives are not included in the
above reconciliation from the opening to closing net debt position.
17. Other reserves
Six months ended 30 September 2025 Capital redemption reserve Merger reserve Cost of hedging reserve Cash flow hedge reserve Total
£m £m £m £m £m
At 1 April 2025 1,033.3 (703.6) 11.4 (21.9) 319.2
Changes in fair value recognised in other comprehensive income - - 4.5 (4.9) (0.4)
Amounts reclassified from other comprehensive income to profit or loss - - - 10.5 10.5
Tax on hedge effectiveness taken directly to equity - - (1.1) 1.2 0.1
Tax on items recorded within other comprehensive income - - - (2.6) (2.6)
At 30 September 2025 1,033.3 (703.6) 14.8 (17.7) (326.8)
Six months ended 30 September 2024 Capital redemption reserve Merger reserve Cost of hedging reserve Cash flow hedge reserve Total
£m £m £m £m £m
At 1 April 2024 1,033.3 (703.6) 8.7 (27.3) 311.1
Changes in fair value recognised in other comprehensive income - - (1.5) 1.9 0.4
Amounts reclassified from other comprehensive income to profit or loss - - - 2.6 2.6
Tax on hedge effectiveness taken directly to equity - - 0.4 (0.5) (0.1)
Tax on items recorded within other comprehensive income - - - (0.6) (0.6)
At 30 September 2024 1,033.3 (703.6) 7.6 (23.9) 313.4
Year ended 31 March 2025 Capital redemption reserve Merger reserve Cost of hedging reserve Cash flow hedge reserve Total
£m £m £m £m £m
At 1 April 2024 1,033.3 (703.6) 8.7 (27.3) 311.1
Changes in fair value recognised in other comprehensive income
- - 3.6 8.6 12.2
Amounts reclassified from other comprehensive income to profit or loss
- - - (1.3) (1.3)
Tax on hedge effectiveness taken directly to equity - - (0.9) (2.2) (3.1)
Tax on items recorded within other comprehensive income
- - - 0.3 0.3
At 31 March 2025 1,033.3 (703.6) 11.4 (21.9) 319.2
The capital redemption reserve arose as a result of a return of capital to
shareholders following the reverse acquisition of United Utilities PLC by
United Utilities Group PLC in the year ended 31 March 2009. The merger reserve
arose in the same year on consolidation and represents the capital adjustment
to reserves required to effect the reverse acquisition.
The group recognises the cost of hedging reserve as a component of equity.
This reserve reflects accumulated fair value movements on cross-currency swaps
resulting from changes in the foreign currency basis spread, which represents
a liquidity charge inherent in foreign exchange contracts for exchanging
currencies and is excluded from the designation of cross-currency swaps as
hedging instruments.
The group designates a number of swaps hedging non-financial risks in cash
flow hedge relationships in order to give a more representative view of
operating costs. Fair value movements relating to the effective part of these
swaps are recognised in other comprehensive income and accumulated in the cash
flow hedging reserve.
18. Contingent liabilities
Ofwat and Environment Agency investigations
At the reporting date, UUW remains subject to the enforcement case opened by
Ofwat in 2024, along with the other water and wastewater companies in England
and Wales that have not yet had their investigations concluded. If a company
is found to have breached its legal obligations this could result in a
financial penalty of up to 10 per cent of relevant wastewater turnover (which
in UUW's case would be around £100 million), and/or a requirement to rectify
any obligations deemed to be required as a consequence of those findings. To
date, Ofwat has issued penalties to, or agreed enforcement packages with, five
companies, with values ranging from 5 per cent to 9 per cent of relevant
wastewater turnover. Ofwat has also proposed an enforcement package worth
around 2.8 per cent of relevant wastewater turnover with one other company,
which is subject to public consultation before a final decision is made. UUW
has received and responded to notices under s203 of the Water Industry Act
1991 and continues to fully co-operate with Ofwat through the investigation
process. Ofwat has stated that while it has concerns with the sector that it
must investigate, the opening of enforcement cases does not automatically
imply that companies have breached their legal obligations or that a financial
penalty will necessarily follow. UUW has not been given a firm indication of
the expected timeframe for the conclusion of Ofwat's ongoing investigation, or
any subsequent action.
Similarly, the Environment Agency has made a number of data requests and
undertaken site visits as part of its ongoing industry-wide investigation,
with which the group continues to fully comply. This investigation is focused
on environmental permit compliance at wastewater treatment works and
wastewater networks, with the Environment Agency having a number of
enforcement options open to it if it concludes that companies have breached
their permit conditions and/or illegally polluted the environment. These
include the potential for criminal prosecution and unlimited fines. As with
the Ofwat investigation, this remains ongoing. It is currently unclear when
this matter will be resolved.
Prof Carolyn Roberts collective action
As disclosed in the group's financial results for the year-ended 31 March
2025, collective proceedings in the Competition Appeal Tribunal ('CAT') were
issued on 8 December 2023 against United Utilities Water Limited ('UUW') and
United Utilities Group PLC on behalf of approximately 5.6 million domestic
customers following an application by the Proposed Class Representative
('PCR'), Professor Carolyn Roberts. The PCR alleges that customers have
collectively paid an overcharge for sewerage services during the claim period
as a result of UUW allegedly abusing a dominant position by providing
misleading information to regulatory bodies. The estimated total aggregate
amount the PCR is claiming against UUW (including interest) for household
customers is at least £141 million. On 7 March 2025, the CAT unanimously
concluded that claims could not proceed on the basis that the claims brought
forward are excluded by section 18(8) of the Water Industry Act 1991.
Subsequently, the PCR has been granted permission by the Court of Appeal to
appeal this decision, with the appeal hearing expected to take place in 2026.
UUW believes the claim is without merit and will robustly defend it, should
the certification decision be overturned on appeal. Separate letters before
action were issued on 20 December 2024 in relation to similar claims in
respect of non-household customers, however it is not clear how these will
proceed following the CAT's decision not to certify the claims brought in
respect of domestic customers.
19. Financial and other commitments
The group has credit support guarantees as well as general performance
commitments and potential liabilities under contract that may give rise to
financial outflow. The group has determined that the possibility of any
outflow arising in respect of these potential liabilities is remote and, as
such, there are no financial liabilities to be disclosed in this regard (31
March 2025: none, 30 September 2024: none).
At 30 September 2025, there were commitments for future capital expenditure
and infrastructure renewals expenditure contracted, but not provided for, of
£219.4 million (31 March 2025: £125.3 million, 30 September 2024: £234.8
million).
30 September 31 March 30 September
2025 2025 2024
£m £m £m
Property, plant and equipment 211.2 112.0 217.3
Intangible assets 3.1 0.7 3.3
Infrastructure renewals expenditure 5.1 12.6 14.2
Total commitments contracted but not provided for 219.4 125.3 234.8
The company has not entered into performance guarantees as at 30 September
2025, 31 March 2025 and 30 September 2024.
20. Related party transactions
The related party transactions with the group's joint ventures and other
interests during the period, and amounts outstanding at the period end date,
were as follows:
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£m £m £m
Sales of services 191.3 175.3 338.8
Charitable contributions advanced to related parties 0.1 0.1 0.2
Purchases of goods and services 0.4 - 1.5
Interest income and fees recognised on loans to related parties 2.2 3.0 5.9
Amounts owed by related parties 85.7 100.0 101.0
Sales of services to related parties mainly represent non-household wholesale
charges to Water Plus Group Limited ('Water Plus'), a joint venture owned and
controlled on a 50/50 basis by the group and Severn Trent PLC under a joint
venture agreement, that were billed and accrued during the period. These
non-household wholesale charge transactions were on market credit terms, which
are governed by the wholesale charging rules issued by Ofwat.
At 30 September 2025 amounts owed by joint ventures, as recorded within trade
and other receivables in the statement of financial position, were £85.7
million (30 September 2024: £100.0 million; 31 March 2025: £101.0 million),
comprising £31.2million (30 September 2024: £27.5 million; 31 March 2025:
£27.4 million) of trade balances, which are unsecured and will be settled in
accordance with normal credit terms, and £54.5 million (30 September 2024:
£72.4 million; 31 March 2025: £73.6 million) relating to loans.
Included within these loans receivable were the following amounts owed by
Water Plus:
● £53.9 million outstanding on a £95.0 million revolving credit facility
provided by United Utilities PLC, with a maturity date of December 2026,
bearing a floating interest rate of the Bank of England base rate plus a
credit margin. This balance comprises £57.5 million outstanding, net of a
£3.6 million allowance for expected credit losses; and
● £0.5 million receivable being the £11.9 million fair value of amounts owed
in relation to a £12.5 million unsecured loan note held by United Utilities
PLC, with a maturity date of 28 March 2027, net of a £nil allowance for
expected credit losses and £11.4 million of the group's share of joint
venture losses relating to historic periods as the loan note is deemed to be
part of the group's long-term interest in Water Plus. This is a zero-coupon
shareholder loan with a total amount outstanding at 30 September 2025 of
£12.5 million, comprising £11.9 million receivable measured at fair value,
and £0.6 million recorded as an equity contribution to Water Plus recognised
within interests in joint ventures.
A further £0.1 million of non-current receivables was owed by other related
parties at 30 September 2025.
During the period, United Utilities PLC provided guarantees in support of
Water Plus in respect of certain amounts owed to wholesalers. The aggregate
limit of these guarantees was £50.7 million, of which £26.0 million related
to guarantees to United Utilities Water Limited.
21. Events after the reporting period
Other than in respect of the £100 million term loan facility that the group
executed on 28 October 2025, which was drawn down on 10 November 2025 as
described in note 13, there have been no material events subsequent to 30
September 2025 that either require adjustment to the amounts disclosed in the
interim financial statements or disclosure on the basis that they could
materially affect users' understanding of the interim financial statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
Responsibilities statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge: the condensed set of financial
statements has been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted for use in the UK; and the interim management report
includes a fair review of the information required by:
● DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
● DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The directors of United Utilities Group PLC at the date of this announcement
are listed below:
Sir David Higgins
Louise Beardmore
Phil Aspin
Doug Webb
Liam Butterworth
Kath Cates
Ian El-Mokadem
Alison Goligher
Clare Hayward
Michael Lewis
Marina Wyatt
This responsibility statement was approved by the board and signed on its
behalf by:
……………………….. ……………………….
Louise Beardmore Phil Aspin
Chief Executive Officer Chief Financial Officer
12 November 2025 12 November 2025
INDEPENDENT REVIEW REPORT TO UNITED UTILITIES GROUP PLC
Conclusion
We have been engaged by United Utilities Group PLC ("the Company") to review
the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 September 2025 which comprises the consolidated
income statement, the consolidated statement of comprehensive income, the
consolidated statement of financial position, the consolidated statement of
changes in equity, the consolidated statement of cash flows and the related
explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2025 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the
UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other information
contained in the half-yearly financial report and consider whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the latest annual financial statements of the Group
are prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached
Gill Hopwood-Bell
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
12 November 2025
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BRBDBLXBDGUD
Copyright 2019 Regulatory News Service, all rights reservedRecent news on United Utilities
See all newsREG - United Utilities Grp - Half-year Financial Report
AnnouncementREG - United Utilities Grp - Director/PDMR Shareholding
AnnouncementREG - Water Services Auth - New bonus rule blocks £4m in first year
AnnouncementREG - United Utilities Grp - Director/PDMR Shareholding
AnnouncementREG - Official List - Official List Notice
Announcement