UNITED Utilities chief executive Philip Green put a positive gloss on a profits slump yesterday, claiming that the figures were still better than expected.

The company blamed the outcome of a regulatory review of water bills by Ofwat for a 36% dive in pre-tax profits when it unveiled its first half figures.

Mr Green, who earlier this week announced his intention to leave the Warrington-based utility next March, after five years in control, said: “We’re very pleased, they’re slightly better than we were expecting and better than the markets were expecting.”

Turnover in the six months to September 30 fell from £786.6m to £762.4m and pre-tax profits dropped from £189.6m to £122.2m.

Revenues from the regulated water business fell 3% to £748m and Mr Green said: “The revenue line is down by 3%, but customers are paying less and prices are down by 4%.”

Profits were also affected by higher interest costs on index-linked debts of £2bn, but Mr Green said that £600m realised from the sale of non-core businesses has strengthened the group’s balance sheet by reducing debts.

He also warned that revenues will be slightly lower in the second half due to seasonal patterns. “Fewer people are watering their gardens,” he said.

Looking ahead, he added: “United Utilities has a robust capital structure and should benefit from predictable regulated revenue streams over the next five years.”

Capital expenditure totalled £307m in the first half and will continue at high levels into the second half, including the completion next spring of the £120m West East Link.

The project is one of the largest of its kind and will create a 35-mile pipeline connecting Liverpool to Manchester. It will allow the transport of water by gravity from Greater Manchester to Merseyside, with the option to pump water in the opposite direction. It aims to provide more flexibility of supply.

Referring to his impending departure, Mr Green said he will probably spend time unwinding in South Africa, adding: “I don’t want to be chief executive of another public company, but I hope to chair a couple.”