United Utilities, the FTSE 100 water company serving the North West of England, expects to invest more than £2 billion this year after capital spending jumped 75% in the first half.
Net regulatory capital expenditure rose to £993 million in the six months to 30 September, from £569 million a year earlier.
Revenue increased 12% to £1.46 billion, driven by a real-terms rise in allowed wholesale revenues and a 3.5% inflation-linked increase in the revenue cap.
Underlying operating profit rose 7% to £579 million on a like-for-like basis.
Reported pre-tax profit climbed 66% to £539 million, flattered by gains on interest rate swaps and lower interest charges after a change in how inflation-linked debt is measured.
Underlying earnings per share slipped 1.6% to 56.3p, diluted by the £800 million share placing in April.
The interim dividend rises 3.5% to 18.51p, in line with the company's policy of tracking CPIH, the consumer prices index including housing costs.
The company expects full-year revenue of £2.7 billion to £2.8 billion and a total dividend of 55.54p.
Ofwat ruling awaited
United Utilities is the last water company with an open enforcement case from the sector-wide investigation by Ofwat, the industry regulator, into sewage treatment works and networks.
If Ofwat finds a breach, the penalty could reach 10% of relevant wastewater turnover, or about £150 million.
Ofwat has concluded its investigations into ten other companies, with penalties or enforcement packages worth 2% to 9% of turnover.
United Utilities has made no provision and said the matter could be concluded in the near future.
Fewer leaks
Leakage fell by a further 14 million litres a day, and there have been no serious pollution incidents so far this year.
Gearing, or net debt as a share of the regulated asset base, fell to 56% from 60% after the share issue.
