United Utilities shares rise as launches GBP800 million share offer

(Alliance News) - Shares in United Utilities Group PLC rose on Thursday after it reported sharply higher annual results, expanded its investment programme, and launched a GBP800 million equity raise to help pay for it.

United Utilities is a Warrington, England-based water and waste water utility. Its shares were up 11% to 1,451.50 pence early Thursday in London, the best performer in the FTSE 100 index, which was up just 0.6%.

Pretax profit more than doubled to GBP779.0 million in the financial year that ended March 31 from GBP355.0 million the year before, and operating profit climbed 74% to GBP1.10 billion from GBP631.5 million, as revenue increased by 22% to GBP2.62 billion from GBP2.15 billion. On an underlying basis, pretax profit rose 44%, operating profit 35% and revenue 20%.

Earnings per share more than doubled to 86.1 pence from 38.8p.

The water utility proposed a final dividend of 35.78p, up 3.5% from 34.57p a year earlier. This increased the full-year payout to 55.54p, up 3.5% from 53.66p in financial 2025. Looking ahead, United Utilities said it will maintain dividend growth in line with the UK consumer prices index including owner occupiers' housing costs, CPIH.

United Utilities also announced an equity raise of GBP800 million, intended to fund the equity component of a GBP2.5 billion increase in the company's investment programme for the AMP8 regulatory cycle, which covers financial 2025 to 2030.

The plan was submitted to UK regulator Ofwat on Thursday, United Utilities said, and will increase the company's total AMP8 capital investment programme to GBP11.5 billion. It will be used for water and wastewater infrastructure investment across the the North West of England, the utility's coverage area.

United Utilities said this will support the development of homes, data centres and clean energy, creating 4,000 jobs additional to the 30,000 supported by its existing AMP8 plans.

The equity issue will consist of a placing with institutional investors, a subscription by company directors, and a retail share offer via the RetailBook platform. The price will be set as part of the bookbuild for the placing, which will be led by Deutsche Numis and JP Morgan Securities. The total new shares issued is expected to be no more than 10% of current share capital, United Utilities said.

Looking ahead, the company expects revenue to rise further in financial 2027 to between GBP2.7 billion and GBP2.8 billion.

By Tom Waite, Alliance News editor

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