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United Utilities sees higher first-half profit, revenue

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(Reuters) – United Utilities Group <UU.L> said on Friday it expected underlying operating profit and revenue for the first half of the year to be higher, even as it promised to reduce leakages and improve service while controlling prices.

The water utility expects to invest an additional 80 million pounds during the current financial year to safeguard continuity of supplies to customers and protect its water resources after Britain’s spell of extreme hot and dry weather.

“We anticipate the operating costs associated with the exceptional dry weather period to be an adjusted item and therefore underlying operating profit for the first half of 2018/19 is expected to be higher,” the utility said in a statement.

The company said it expected a small increase in group net debt as at Sept. 30 from its position at the end of March.

Earlier this month, United Utilities and other top British water companies unveiled business plans to reduce leakages by 15 percent in 2020-2025 and improve service while controlling prices after their performance was questioned during the country’s hottest summer in decades.

United Utilities, which supplies 3 million homes and 200,000 businesses across north-western UK, said it would cut average bills by 10.5 percent in real terms for 2020-2025.

British water utilities have faced a series of fines and a summer marked by supply shortages and hosepipe bans.

Britain’s Environment Minister Michael Gove asked water company bosses to explain why they have not met targets for reducing leakages as the country struggles to cope with one of the hottest summers in living memory.

Eight companies had been invited to a meeting to discuss how they are going to address leakages: South Staffordshire, Bristol, Severn Trent <SVT.L>, Thames, Yorkshire, Essex and Sussex, Portsmouth and United Utilities.

(Reporting by Noor Zainab Hussain and Samantha Machado in Bengaluru; Editing by Gopakumar Warrier)

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