(Reuters) - Water utility company United Utilities Group Plc (UU.L) said it expected full-year revenue to be slightly lower due to the accounting impact of its Water Plus joint venture.
The company, the largest of Britain’s three publicly-listed water suppliers by market value, said underlying operating profit was expected to be moderately higher in 2016-2017.
United Utilities said its infrastructure renewals expenditure (IRE) increased slightly in the second half of the year.
However, the company maintained its full-year IRE estimate of about 800 million pounds, moderately lower than last year, mainly due to a slightly different mix of capital investment.
United Utilities also said it expects an impact from higher retail price index inflation and sees underlying net finance expense for 2016-2017 at around 240 million pounds.
The company, which supplies water across Cheshire, Lancashire and Cumbria, said it expects a small increase in group net debt at March 31 2017, compared with its position at Sept. 30.
Shares in United Utilities had risen after Britain’s historic vote to leave the European Union drove investors to defensive stocks such as utility companies, which are seen as “bond-proxies” due to their regular and high returns.
While, United Utilities would not see any direct impact from Brexit, the company faces a risk of interest rates going up on borrowing, and future potential regulatory changes could hurt its dividend policy.
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Reporting by Arathy S Nair and Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair