Regulated

Our water and wastewater activities have delivered strong growth over the past year. Revenue increased by 7.2 per cent to £1,416 million and operating profit increased by 5.3 per cent. This growth principally reflects the 8.3 per cent price increase allowed by our regulator to fund the essential investment we need to make to deliver better services to our customers and make environmental improvements across the North West. In the last financial year (2006/07), we spent £826 million upgrading our infrastructure in the region, representing the peak of activity in our capital investment programme.

The 2009 water price review will be a key value driver for United Utilities as it will set our price limits from 1 April 2010 to 31 March 2015. We are currently developing our draft five-year business plan, scheduled for submission to Ofwat in August 2008. This plan forms the first element of our long-term vision for our business which needs to adapt to the changing climate and demographics of the North West.

In terms of our regulated performance, we aspire to be in the top quarter of the water sector on the most important measures and we are making good progress against our top five measures:

  • Relative efficiency – we have closed the gap with the most efficient water companies over the last two years.
  • Leakage – this is the second consecutive year that we have met or outperformed our leakage target.
  • Pollution – in 2007, we recorded one water and eight wastewater Category 1 (the most serious type) and Catergory 2 incidents compared with two water and 21 wastewater incidents in 2005.
  • Sewer flooding – we remain on track to meet our medium-term target of reducing the number of properties on the sewer flooding register by half.
  • Overall customer satisfaction – we made good progress in 2007/08 and 73 per cent of our customers were satisfied with our service.

In support of achieving that upper quartile position, we have continued to upgrade our infrastructure, replacing 650 kilometres of water mains during 2007/08; our drinking water quality standard was 99.94 per cent for the year; and we were ranked first among the UK’s water and sewerage companies in 2006/07 by Ofwat for both water and sewerage in its most recent serviceability assessment, reflecting our long-term stewardship of our assets.

We have delivered real progress, but we have more to do to improve our performance.