United Utilities raises cash for new investment plan

England’s north west water provider United Utilities (UU.) is already reaping the rewards of the higher investment allowed under the new regulatory period, called AMP8.

Revenue and profit climbed in the 12 months to 31 March as the company began raising bills and spending in line with the package agreed with regulator Ofwat. Operating profit climbed 74 per cent in the year to £1.1bn.

The business model for the regulated water companies is to expand regulated capital value (RCV), as Ofwat permits a return on this figure. The increase in RCV between 31 March and the year before was 7.5 per cent, to £16.5bn, as net regulatory capital spending rose by 50 per cent to £1.5bn.

Alongside the results, United Utilities announced a £2.5bn increase to the £9bn AMP8 plan as part of Ofwat’s “re-openers” programme. The company has some room to breathe on borrowing as well, with gearing below the 65 per cent top of the target range.

The higher spending will also be part-funded by an £800mn equity raise announced alongside the results. The investor buy-in comes as the government combines the various regulators that cover the water sector, a response to Sir Jon Cunliffe’s review from last year. Ministers have promised a harder line on the sector, which has come under fire for continuing to constantly dump sewage in England’s rivers and seas.

Alongside the FY2026 results, United Utilities has raised guidance for returns for the full five-year period to 10-11 per cent, a single percentage point increase. This is down to the re-openers and also higher inflation expectations.

The investment-grade water companies (i.e. not Thames Water) are making hay with the government call to raise spending and stop pollution. The counter-punch of greater limits to household bill increases will surely kick in down the line, alongside potential fines for polluting. Hold.

Last IC view: Hold, 1096p, 13 Nov 2025