REG - United Utilities Grp - Strategic Update

United UtilitiesAnnouncement

Today 07:02

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RNS Number : 4772C  United Utilities Group PLC  30 April 2026

30 April 2026: United Utilities Group PLC today announces a strategic update,
alongside its preliminary, unaudited full year results for the year ended 31
March 2026 in a separate announcement on our website here
(https://www.unitedutilities.com/corporate/investors/results-and-presentations/full-and-half-year-results/)
.

Accelerating investment supporting economic growth and resilience in the North
West

 ●    Guidance for AMP8 capital investment programme increased to c. £11.5
      billion, up from

c. £9 billion, representing c. £2.5 billion of incremental investment
 ●    Incremental investment to support housing and industrial growth in the
      region, AI-driven industrial development, proactive asset replacement and
      environmental improvements
 ●    c. £1.4 billion of incremental investment programme submitted to Ofwat
      today with the balance of the c.£2.5 billion
      expected via future Re-openers(1)
 ●    Asset base now expected to grow at 10% CAGR through to 2030(2), up from
      prior guidance of 7%
 ●    Upgraded financial framework: targeting regulatory returns(3) of 10-11% in
      AMP8, an increase of 100 basis points versus prior guidance
 ●    Funding the equity element of the c. £2.5 billion incremental capex through
      an £800 million placing, announced separately today, with gearing to remain
      within target range of 55-65% through AMP8

 

Louise Beardmore, Chief Executive Officer, said:

"One year into our most ambitious investment programme, we have made a strong
start delivering

£1.5 billion of capital investment in FY26 and mobilising over 100 supply
chain partners to achieve our regulatory commitments on time. We are committed
to supporting a stronger, greener, healthier North West, and the plans we are
announcing today will do exactly that. We expect it could create a further
4,000 jobs across our supply chain, on top of the 30,000 supported by our
existing AMP8 programme, by enhancing our infrastructure and aligning with the
Government's mission for economic growth and decarbonisation.

 

The proposals we have submitted today for c. £1.4 billion, as part of Ofwat's
2026 Re-opener process, represent the first phase of our incremental
investment programme and focus on providing the water infrastructure for
thousands of new homes, powering data centres, enabling clean energy and
strengthening the resilience of our network. The balance of the c. £2.5
billion is expected via future Re-openers as we continue to invest further in
the North West through the AMP.

 

With our upgraded financial framework, sector-leading financing performance
and strong delivery track record, we are confident in our ability to generate
attractive and sustainable returns for shareholders while delivering for our
customers, communities and the environment."

 

Investment background and 2026 Re-opener

Since the PR24 Final Determination in December 2024, the scale and urgency of
infrastructure investment required across the North West has increased
significantly. Mandatory housing targets for local authorities in the region
have increased, with 66,000 additional homes expected to be built by 2030.
The Government's declaration of data centres as Critical National
Infrastructure and the launch of the AI Growth Zone initiative have generated
significant new demand for water capacity in Greater Manchester that was not
reflected in the Company's PR24 business plan. HyNet, one of the UK's largest
industrial decarbonisation programmes, has been confirmed as a highest
priority programme in the Government's Major Projects Portfolio.

 

United Utilities today submitted proposals to Ofwat under the
AMP8 Re-opener process, requesting approval for c.£1.4 billion of
incremental investment. Plans for a further c.£1.2 billion of investment are
expected to be submitted for approval through subsequent submissions in 2027
and 2028 and transitional investment into AMP9, taking total incremental
investment to c.£2.5 billion and total AMP8 capital investment to c.£11.5
billion.

 

The 2026 Re-opener submission comprises investment into the
following areas:

 ●    Growth programme (c. £770 million): The programme will deliver new water
      infrastructure for data centres in East Manchester (c. £200 million),
      non-potable water supply to the clean energy cluster in Ellesmere Port (c.
      £220 million), and wastewater treatment capacity upgrades at 34 sites to
      support 66,000 new homes across the region (c. £350 million). The investment
      is expected to support over 4,000 new jobs in the supply chain, in addition to
      the 30,000 jobs already supported by the Company's existing AMP8
      programme.
 ●    Proactive asset replacement (c. £410 million): The programme will
      proactively address five asset classes - gravity sewers, water network
      storage, trickling filters, rapid gravity filters and boreholes.
 ●    Windermere gated process and strategic water resources (c.£190
      million): Investment covering 10 projects across Windermere progressing
      through Ofwat's large schemes gated process (c.£110 million) and acceleration
      of strategic water resource development across the region (c. £80 million).

 

Ofwat's draft decisions on the 2026 submission are expected on 15 August 2026,
with final decisions on 15 December 2026.

 

Preliminary, unaudited full year results - strong platform for delivery

United Utilities delivered strong financial and operational results for the
year ended 31 March 2026, providing a firm platform for the accelerated
investment programme. Underlying revenue increased 20% to £2,576 million,
reflecting higher regulatory revenues under the PR24 Final Determination, with
underlying operating profit up 35% to £1,060 million and underlying EPS up
42% to 107.1 pence. Capital investment increased 41% to £1.5 billion in line
with expectations, with our regulatory commitments achieved on time in the
year.

 

Operationally, the Company achieved a 23% reduction in spills, and 42% fewer
internal sewer flooding incidents, and is in reward across
all three customer service measures(4). The supply chain is fully
mobilised with over 100 suppliers in contract, delivery
pathways established and working well, enabling us to achieve our
regulatory commitments on time. The regulatory return for FY26 was 13.0% and
full details of the financial results are set out in the accompanying
preliminary, unaudited full year results announcement.

 

Upgraded financial framework

The Company is upgrading its financial framework to reflect the accelerated
investment programme:

 ●    Targeting regulatory returns of 10-11% in AMP8, an increase of 100bps
      outperformance compared with prior guidance
 ●    Capital investment increasing from c.£9 billion to c.£11.5 billion in AMP8
 ●    Asset base compound annual growth rate of around 10%, up from around 7%
      previously
 ●    Maintain dividend growth in line with CPIH(5)
 ●    Maintain gearing within target range of 55-65%(6), supported by a c.£800
      million equity raise

 

Equity placing

To fund the equity element of the c. £2.5 billion incremental investment
programme, United Utilities Group PLC is today separately announcing an
equity placing of £800 million. The placing has been structured to ensure
gearing remains within the Company's 55-65% target range through AMP8. The
base AMP8 programme of c.£9 billion was already fully funded prior to
the Re-opener submission. Further details of the placing, including terms
and conditions, are set out in a separate announcement released today.

 

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
 Andrew Ward - Corporate Affairs Director                                    +44 734  168 3924
 Graeme Wilson / Louise Male - Teneo Communications                          +44 207 260 2700

 

Preliminary full year results and strategic update presentation webcast -
Thursday 30 April 2026

 We will host a presentation and Q&A with management at 8:00am(BST),
which can be accessed using the details provided below:

https://teams.microsoft.com/meet/360160455663116?p=tcTOMJf34cDlau2b2r
(https://teams.microsoft.com/meet/360160455663116?p=tcTOMJf34cDlau2b2r)

Meeting ID: 360 160 455 663 116, Passcode: tv7it6Wu

LEI: 2138002IEYQAOC88ZJ59

(1)Expectation of additional capital investment, to be determined through
Ofwat re-openers, comprising Ofwat's 2026 Cost Change Process, Ofwat's 2027
Cost Change process, Ofwat's 2028 Cost Change Process and Transitional
Investment

(2)From the 2024/25 baseline of £15,367 million assuming CPIH inflation of
c.3.0% on average in AMP8

(3)Regulatory return is the return on regulatory equity comprising the base
return, outperformance and inflation as per Table 1F of the Ofwat Annual
Performance Report.

(4)Measures of Experience: customer measure of experience, developer measure
of experience and business retailer measure of experience

(5)Target dividend growth in line with CPIH based on FY26 DPS of 53.66 pence

(6) 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).

 

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.

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