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22 May 2020 | 07:07

United Utilities to review dividend after upping payout

(Sharecast News) - United Utilities increased its final dividend but said it would review its dividend policy after £56m of Covid-19 costs contributed to a £5m decline in annual operating profit. Operating profit for the year to the end of March fell to £630.3m from £634.9m as revenue rose to £1.86bn from £1.82bn. Costs related to Covid-19 were £56m including £18.1m of expected bad debts and £37m for losses at the Water Plus joint venture.

The final dividend increased 3.2% to 28.40p a share taking the annual payout to 42.60 from 41.28p a year earlier. The FTSE 100 company said it would review its dividend for the AMP7 regulatory period starting in 2020 when the impact of Covid-19 is clearer.

United Utilities took a charge of £32m for its share of Covid-19-related losses at its Water Plus joint venture with Severn Trent and £5m of expected losses from loans to Water Plus. £18.1m of remaining coronavirus costs was for expected non-payment of bills and £1.1m of costs for the direct response to the pandemic.

Steve Mogford, United Utilities' chief executive, said: We have delivered financial performance that supports the payment of the final dividend in August 2020, in line with our AMP6 commitment.

"The economic implications of Covid-19 will provide a challenging backdrop to the AMP7 regulatory period ... It is, however, too early to predict the full impact of Covid-19 on inflation, the economy more generally and on our business, and we will review our dividend policy for AMP7 as a clearer picture of the post Covid-19 economic environment emerges."

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