Overview
This has been a very significant year for United Utilities. After much careful consideration the company accepted Ofwat’s price limits for the next five years. The challenge of meeting those price limits meant taking some difficult decisions as we strive to ensure the company is operating as efficiently as possible.
As a consequence, the company has been able to affirm its dividend policy through to 2015, providing clarity for customers and investors. At the same time, the next five years will see substantial investment in our region that will benefit our customers, the economy and the environment.
Financial performance and dividend
On behalf of the board I am pleased to report a sound underlying financial performance for the year ended 31 March 2010, despite a challenging economic climate. The board is proposing a final dividend for the year ended 31 March 2010 of 23.13 pence per ordinary share in line with our policy. Together with the interim dividend of 11.17 pence per ordinary share, the total ordinary dividend relating to the year is 34.30 pence. The final dividend is expected to be paid to shareholders on 2 August 2010.
Operational performance
United Utilities has continued to make progress in the area of operational performance and our customers tell us that satisfaction levels have improved further, but there is still more to do to achieve the group’s ambition of world class performance. Our employees are integral in delivering high levels of service and I would like to thank them for their dedication and continued support. Record levels of rainfall last November contributed to serious flooding in our region, especially in my home county of Cumbria. I would like to commend the large number of our people who worked extremely hard to serve customers in exceptionally difficult conditions.
Corporate governance
We remain committed to adopting the highest standards of corporate governance and this underpins our approach to doing business. We endeavour to operate in an environmentally sustainable and socially responsible manner. We listen to the views of all our stakeholders and this helps shape the manner in which we do business. Our efforts to help resolve the issue of site area charging have borne fruit and we are pleased that the UK Government has legislated to allow companies to introduce concessionary schemes for voluntary and community groups to assist them in paying their surface water drainage bills. We strive for an exemplary health and safety record and our processes in this area continue to be enhanced. It is important that we carry out our operations efficiently and place the welfare of employees very high on our agenda. Whilst we do not get everything right, I was delighted to accept, on behalf of all our employees, the award of Business in the Community’s Company of the Year for 2009 in recognition of the group’s overall impact on society.
Board changes
We say farewell and thank you to Andrew Pinder, who steps down from the board in July after nine years, and Tim Weller, who is leaving to join Cable&Wireless Worldwide, after serving as chief financial officer over the past four years. We wish Andrew and Tim all the best in the future.
Looking forward
I believe that with the group’s consistent focus on its utility skills, we are well positioned to meet the challenges of the new five year regulatory period and beyond. I hope our shareholders, employees and customers will continue to share in United Utilities’ success.
Dr John McAdam
Chairman