United Utilities' Profits Grow

"We are initiating a sale process for our electricity distribution assets, with a view to maximizing shareholder value," said Chief Executive of United Utilities, Philip Green. "We expect to return to shareholders the net equity proceeds from the proposed sale."

Analyst Lakis Athanasiou at Collins Stewart mentioned that the sale would be welcomed. Even though United Utilities is overvalued along with much of the sector, in his opinion, the move could put the group in play as a possible acquisition target alongside its peers.
United Utilities' management is planning to focus on the water aspect of the company's business.

Chief Executive of United Utilities, Philip Green mentioned their water business represented over 85 per cent of the group's regulatory asset value and they believe that shareholders' interests were best served by their focusing on the much larger water asset base, which offers significantly more growth potential than their electricity assets.

United Utilities expected to save £10 million annually by 2008-2009 in costs from management reorganization and the sale of operating divisions not required any more.

United Utilities' CEO, Mr. Green also mentioned: "We have delivered good profit growth, with a strong financial and operational performance. Our strategy is to focus on our core skills of managing water, wastewater, electricity and gas networks to create a world class operator of utility infrastructure. This strategic focus has helped deliver operational and service improvements. We have restructured our management organization, around separate asset operator and asset owner functions, to sharpen our commercial focus and help deliver and sustain further performance improvements."

Mr. Green became the CEO of the United Utilities in April 2006, and during this period he succeeded in reducing leaks and also had reduced considerably the pollution incidences.

During morning trading in London, United Utilities' shares rose 3.9 per cent, to 803p.

United Utilities PLC was created from the merger of North West Water and Norweb in November 1995. Its shares are listed on both the London Stock Exchange and New York Stock Exchange (in the form of ADRs).

Its principal activities are managing and operating the regulated electricity distribution, water and wastewater networks in north west England, a region with a population of around 7 million.

In August 2000 United Utilities sold its electricity and gas supply business and as a result no longer has any significant exposure to the competitive UK generation and supply market.

As well as operating its water, wastewater and electricity networks in the North West, the group also uses its core utility skills to manage other infrastructure assets, through its United Utilities Contract Solutions business.

United Utilities is a member of the FTSE 100 group of leading UK listed companies and employs over 8,000 people in its core utility activities.- Alla Harutyunyan for HULIQ.COM