United Utilities hits leakage target again

The performance from United Utilities came as the group reported a 6 per cent fall in underlying pre-tax profits to 500m due to higher borrowing costs in the year to March 31.

The firm – which serves around 3.2 million homes and businesses – drafted in extra leak tracing teams amid the January snows and took up to 7,200 calls a day from worried customers at the height of the bad weather.

Chief executive Philip Green said: "We are pleased to have met our regulatory leakage target for the fourth consecutive year, despite the exceptional winter weather conditions."

At the operating level, profits at United's regulated water business edged 3 per cent ahead as price rises last year offset falling demand, bad debts and higher power costs.

The firm – which spent 620m on water infrastructure last year – said the price rises were necessary to fund essential investment in its assets.

But the company, along with the rest of the water industry, faces a far tougher settlement for the next five years following the latest decision on prices from regulator Ofwat.

Between 2010 and 2015, prices for its customers must fall by 0.4 per cent a year after inflation, with a 4.3 per cent decline pencilled in for the current financial year.

But the group said it was "well positioned" for the next five years.