(Reuters) - Water utility United Utilities Group Plc (UU.L) said on Tuesday it expected to report higher profit and revenue for the year ending March, helped mainly by regulatory changes in how utilities charge their customers.
Revenue is expected to be “slightly higher” for the year, while underlying operating profit is expected to be “moderately higher”, the company said, adding that current trading was in line with its expectations.
The company’s revenue for the year ended March 31, 2017 was 1.7 billion pounds and profit was 622.9 million pounds.
The utility, which supplies and treats water in north-western UK, maintained its guidance on capital expenditure and outcome delivery incentives - used by Britain’s water regulator Ofwat to push companies to offer better services to customers, improve operations and cut down on costs.
United Utilities said it expected full-year infrastructure renewals expenditure (IRE) to be similar to that of last year, though it rose slightly in the second half of the year. IRE stood at 150.8 million pounds last year.
The company said its regulatory capital value (RCV), a measure of the value of its capital base, is expected to rise by 400 million pounds ($569.4 million) as retail price inflation has increased this year.
The group also expects a small increase in net debt at March 31 compared with its position of 6.71 billion pounds as at Sept. 30, 2017.
United Utilities said it was track to submit its 2019 price review (PR19) business plan in September and it was confident of delivering against Ofwat’s themes.
The PR19 methodology controls the prices companies can charge their customers, with the decisions affecting bills from 2020.
The water industry currently operates within five-year planning cycles and companies submit their business plans prior to the start of each five-year period.
Untied Utilities shares were up over 1 percent in early trading.
Reporting by Arathy S Nair in Bengaluru; Editing by Gopakumar Warrier