UU confirms guidance and trims re-opener request

(by Verity Mitchell)

United Utilities (UU) has issued a pre-close trading statement confirming its guidance for the current year to March 2027. It remains on track to deliver £2bn of capital investment and continues to target regulatory return in the range of 10-11%.

Management has responded to Ofwat’s cost change decision, seeking additional support for investment to enhance network resilience, provide additional water and wastewater services to the North West and enable economic growth in the region.

In its response, UU set out further evidence for the deliverable projects it has proposed and that it considers best value for customers. It also set out revised, needs-based funding arrangements for the industrial growth projects.

£191m will progress through a gated mechanism, with the remaining £79m of asset-specific infrastructure to be funded directly. It pitched this as a ‘risk-basis’ approach which is aligned with the emergence of demand. Industrial growth can therefore be supported as and when requirements emerge.

In terms of the three cost change elements, UU is requesting uplifts of: £55m for growth; £13m for asset heath; and a Windermere ‘gated’ scheme unchanged from Ofwat’s draft response. Together, this is a request by UU for £1,068m, £68m more than Ofwat’s draft allowance of £958m, but £42m less than its original re-opener request.

UU also continues to target £2.5bn of re-openers during the AMP. Its £800m capital raise in April 2026 was predicated on supporting the equity component of this further expenditure, over and above its original AMP8 investment programme.