Newspaper article The Evening Standard (London, England)

More Cashbacks Set to Flow from the Waters; MARKET REPORT

Newspaper article The Evening Standard (London, England)

More Cashbacks Set to Flow from the Waters; MARKET REPORT

Article excerpt


IT is all terribly confusing. Having spent much of the bank holiday weekend sheltering under an umbrella, I was somewhat irked at being repeatedly told I could not wash my car or water the lawn, despite the wettest May for more than two hundred years. To make matters worse, the drought orders will remain in place for another six months, at least.

Galling then, that AWG, the old Anglian Water, and other water companies will tomorrow announce further big returns to shareholders. A large rise in profits is on the cards at rival United Utilities when it reports on Thursday. AWG is expected to produce-full-year pre-tax profits on continuing operations up from [pounds sterling]62 million to about [pounds sterling]103 million.

Brokers say the company's [pounds sterling]75 million share buyback programme is well under way and further returns are expected as capital is released from disposals.

AWG said in March that its regulated water operation and its unregulated businesses had performed in line with management expectations.

Morrison Construction Services and Project Investments were sold to Galliford Try in March for [pounds sterling]42 million ,which will leave AWG with an exceptional loss of [pounds sterling]55 million.

Full-year numbers from United Utilities should reflect the benefit of price rises under the new controls on its regulated business.

Brokers are looking for pre-tax profits to be between [pounds sterling]470 million and [pounds sterling]495 million, up from [pounds sterling]400 million.

Deutsche Bank, which predicts profits of [pounds sterling]491 million, believes UU will report a strong performance from its regulated business, comprising North West Water and the Norweb, which have benefited from price rises.

Profit growth from the unregulated business should be held back this time by start-up costs for new contracts. …

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