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Highlights
- Water companies in England and Wales will have to cut their bills by over £67 million in the next year, as several of the water utilities were unable to meet their 2020-2021 performance commitments.
- Severn Trent will be able to charge their customers the highest extra amount of £25 million next year.
- United Utilities will charge its north western customers an additional amount of £20 million.
Water companies in England and Wales will have to cut their bills in the next year by over £67 million, as several water utility firms were unable to meet the standards set by themselves and by the industry regulator Ofwat for 2020-2021.
Private water utility firm, Thames Water, will have to cut its bills by the largest margin out of the 17 water companies in the region. It will face a cut in its bills by £53 million in FY 2023.
Whereas other water utility companies such as Southern Water and Southwest Water will have to slash their bills by almost £46 million and over £15 million, respectively.
However, some water firms performed better than their set targets for 2020-2021 and will thus be able to charge an additional amount. Water companies United Utilities (LON: UU.) and Severn Trent (LON:SVT) will be able to charge their customers an extra amount, with Severn Trent being able to charge the highest.
United Utilities’ northwestern customers will be charged an additional amount of £20 million, whereas Severn Trent’s customers will have to pay an extra £25 million.
In view of this, let us take a closer look at two FTSE 100 index listed stocks in the water utility sector and how they have performed:
- United Utilities PLC (LON: UU.)
United Utilities is a water utility company that treats and distributes water in the northwest of England.
The company is set to announce its interim results later this month, on 24 November.
It had earlier said in its H1 2021 trading update that it expects its H1 2021 group revenue to be in line with H1 2020, while its H1 2021 underlying profit is expected to be higher than H1 2020.
The higher profit expectations are due to reflecting higher revenue and targeted efficiencies, partially offsetting the higher underlying operating costs.
(Image source: EODHD/Others)
United Utilities’ shares closed at GBX 1,066.00, down by 0.09 per cent on 11 November, while the FTSE 100 index closed at 7,384.18, up by 0.60 per cent.
The company’s market cap stood at £7,275.75 million, and its one-year return is at 14.18 per cent as of Thursday.
- Severn Trent PLC (LON: SVT)
Severn Trent is a UK domiciled water utility company.
The company has recently undertaken a major project upgrade of its network in the Aslockton area and is investing around £500,000 to replace about 2kms of its old sewage infrastructure with modern pipes in Nottinghamshire.
It will take around 16 weeks to complete the network upgrade.
(Image source: EODHD/Others)
Severn Trent shares were trading at GBX 2,814.00, up by 1.19 per cent on 11 November.
The company’s market cap stood at £6,960.15 million, and its one-year return is at 9.96 per cent as of Thursday.
