United Utilities completes the trio of listed companies to accept their PR24 settlements

United Utilities (UU) last week joined Severn Trent and Pennon in accepting its final determination for 2025-30 and committing to pay dividends that will continue to increase in line with CPIH.

UU plans to invest £13bn from 2025-2030, including £7.5bn of enhancement expenditure. It secured £2.4bn more than in the draft determination, and an improved cashflow profile. Four major projects were incorporated into enhancement totex as a result of detailed representations by the company. The period will deliver 7% real regulatory capital value (RCV) growth.

Unlike Pennon, management confirmed it would not require any additional equity to underpin the accelerated investment. Management commented that they would have preferred to see a higher cost of capital, but the package was acceptable in the round. 40% of UU’s Outcome Delivery Incentive (ODI) targets have been improved, and have additional protections in place.

Analysts pressed management for an indication of regulatory outperformance, but apart from a recognition that UU expects to continue to beat the allowed return on both embedded and new debt, the company said there would be no guidance (particularly on ODIs) until its capital markets day on 19 June.