A “SOLID” underlying financial performance is in prospect for North West water group United Utilities (UU).

The Warrington-based business said in an update that trading from October 1, 2010, to January 25, 2011, was in line with expectations.

A new five-year regulatory period began last April when watchdog Ofwat limited UU’s requests for price increases between 2010 and 2015.

However, UU said it has made good progress in the early part of the new regulatory period, and went on to say: “The company remains confident of delivering out-performance over the five-year period.”

Last November, UU completed the sale of its non-regulated businesses, raising £600m which will be retained instead of returned to shareholders.

However, investors will share £68m from a 10p interim dividend to be paid on February 2 and part of a 30p total dividend target.

UU said it intends to stick to its dividend policy and reward shareholders with annual payouts equivalent to inflation, plus 2%, through to 2015.

The remaining regulated water and wastewater operations across the region generated better than expected revenues in the first half of the current financial year, although UU expects earnings to be a little lower in the second half.

It warned that December’s big freeze, resulting in an increase in burst water pipes, will also impact on its attempts to hit leakage targets.

However, the group yesterday launched a recruitment drive to help improve services over the next five years involving 40 apprentice roles each year until 2015 and opportunities for at least 15 university graduate engineers each year until 2015.