United Utilities raises shareholder payout despite Windermere pollution
Company said it was ‘making progress’ on reducing pollution, after reports that it illegally pumped millions of litres of sewage into the lake.
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Your support makes all the difference.United Utilities has hiked dividend payouts to investors despite heavy criticism over spilling vast amounts of sewage into England’s largest lake.
The water company’s chief executive said it was “making progress” on reducing pollution, following reports that it illegally pumped more than 140 million litres of raw sewage into Windermere in Cumbria between 2021 and 2023.
Louise Beardmore said the company had “commenced a programme of accelerated solutions” to sewage spills, promising to go “further and faster” over the coming years.
At the same time, the company increased its interim dividend to shareholders by 4.2% to 17.28p, and reported a 10.9% rise in revenue to £1.08 billion for the six months ending in September.
Profit fell 12% versus the same period last year to £140.6 million, while net debt was up 6% to £9.05 billion.
United Utilities, which serves seven million customers in the north west of England, has asked regulator Ofwat to let it increase the average annual water bill by 32% by 2030.
The company says it needs to raise bills to fund improvement works, but Ofwat said it would allow only a 21% hike in a draft decision over the summer. Ofwat is set to make a final verdict on bill increases across the sector in December.
The privatised water sector has faced growing public outrage over the extent of pollution in recent years, amid rising bills, high dividends, and executive pay and bonuses.
Despite the spills into Windermere, one of the UK’s most famous areas of natural beauty, Ofwat awarded United Utilities an “average” annual performance rating in October.
The company has previously said spills into the lake were down to an “engineering issue”.
It comes after ratings agency Moody’s separately downgraded Southern Water’s credit rating to junk, putting it below investment grade.
Southern Water was criticised for a “history of material operational and financial underperformance”, which Moody’s said could continue over the next five years.
Moody’s also lowered Thames Water to junk territory in July. Thames has since been forced to tap creditors for £3 billion in new loans to keep the utility company operational until 2026.
Southern, which has asked for bills increases of 84% over the coming five years, said the downgrade “will have no impact on the services we provide to our customers”.