United Utilities Group (LSE:UU.) on Thursday reported underlying operating profit of £578.7m for the six months to 30 September, up 7% on the prior-year period on a pro forma basis, as the London-listed water utility accelerates spending under its AMP8 investment programme.
Reported revenue rose 11.7% to £1,462m, while underlying revenue, which strips out pass-through items including Haweswater Aqueduct Resilience Programme (HARP) and HS2 diversion income, increased 9.1% to £1,406.9m on a pro forma basis.
Reported profit before tax jumped 65.8% to £539.2m, though the comparison is flattered by swings in fair-value movements on debt and derivatives; underlying profit before tax, which strips those out, rose 5.3% on a pro forma basis to £411.9m.
Earnings per share climbed 55.4% to 54.7p, while underlying EPS fell 1.6% on a pro forma basis to 56.3p, diluted by the additional shares issued in April's equity placing.
The water and wastewater utility firm capitalised on that placing, an £800m raise completed in April to help fund the equity element of its enlarged AMP8 capital programme, which management increased in April to c.£11.5bn from c.£9bn.
Capital investment reached £993.2m in the half, up from £568.5m a year earlier, and the company upgraded its guidance for the current financial year to more than £2bn of capital expenditure, having previously flagged that level as an ambition rather than a locked-in figure.
Net debt stood at £9,805m at 30 September, up from £9,610m a year earlier, while regulatory capital value (RCV) gearing eased to 56% from 60%, towards the lower end of the company's 55-65% target range.
Chief executive Louise Beardmore said the company has more than 1,000 projects underway across the region as part of what it calls the "BIG North West Upgrade", supporting 30,000 jobs, and described the programme as "on-track and fully funded, supported by our robust financial performance and the £800 million of new equity we raised in April".
On the operational side, the company reported zero serious pollution incidents so far this year, a 47% reduction in storm overflow spills against its 2020 baseline, and a further 14 megalitre-per-day cut in leakage after what it says was the largest leakage reduction in the sector last year.
The board declared an interim dividend of 18.51p per share, up 3.5% on last year's 17.88p, in line with its policy of targeting dividend growth at the rate of CPIH inflation.
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The company reiterated its AMP8 financial framework unchanged from its full-year results in April: targeting regulatory returns of 10-11%, c.£11.5bn of capital investment, asset-base growth of around 10% a year, and gearing held within 55-65%.
For the 2027 financial year, United Utilities guided to underlying revenue of between £2.7bn and £2.8bn, alongside underlying operating cost increases of around £100m and capital expenditure of more than £2bn.
The company said it remains on track to deliver around £2.5bn of additional investment through Ofwat's AMP8 re-opener mechanisms, covering the 2026, 2027 and 2028 Cost Change processes alongside transitional investment, having submitted an initial c.£1.4bn re-opener package in April comprising growth projects, proactive asset replacement and Windermere and strategic water resource schemes.
It also flagged a forecast customer outcome delivery incentive (ODI) penalty for the 2027 financial year, though it expects this to improve on the roughly £35m penalty incurred in the 2026 financial year.