UNITED Utilities is considering selling more of its non-regulated business interests to bolster its balance sheet.
The non-regulated business includes providing utility services for clients, compared with its regulated responsibilities for water and waste water provision throughout the North-West.
The Warrington-based group recently raised £130m from the sale of stakes it held in Manila Water and Northern Gas Networks.
Chief executive Philip Green said the proceeds will be retained within the group and also hinted that more disposals could follow.
Mr Green told LDP Business: “It would be no surprise, were we to sell some other parts of our non-regulated business.”
But he explained the disposals were more balance sheet-related than building up a “buffer” or “fighting fund”, ahead of an anticipated ruling from industry watchdog Ofwat today that it must cut customer charges over the next five year regulated period from 2010-2015.
In its initial submission to Ofwat, UU requested permission to raise prices between 2010-2015 to fund investment in its infrastructure refurbishment programme.
But Ofwat’s response was to ask UU to cut household bills by 5% in real terms over the five-year period.
Ofwat will reveal its final decision today, but Mr Green said UU will carefully consider the announcement before responding.
It could accept Ofwat’s five-year programme or appeal to the Competition Commission.
Mr Green said: “We have two months to reflect on what they have to say.”
Some water companies are reported to be considering cutting jobs to maintain their investment in infrastructure renewal works.
However, Mr Green added: “There’s a variety of things we can do, from raising more money, selling more assets or raising prices.
“We always look at improving efficiency, but we’re not saying anything about jobs today.”
Reporting interim results to September 30, Mr Green revealed that UU had increased revenue by £6m to £1.2bn over the six month period and that underlying operating profits had risen from £366m to £370m.
On a pre-tax level, profits fell from £305.8m to £206m.
However, Mr Green said: “This is a sound set of results in a challenging economic climate. Our aim is to keep customer bills affordable.”
