Strong financial performance has seen underlying operating profit rise £32m to £645.1m (2017 -£622.9m) on revenues of £1,735.8m (2017 - £1,704.0m), according to United Utilities full year results for the year ended 31 March 2018 published this morning.

The company has met leakage targets for 10 consecutive years, and has cut leakage by half since the 1990s. Reducing leaks remains a top priority and the use of satellite imagery to detect leaks, and in-pipe assessment techniques are being explored.

Total regulatory capital investment in the year, including £147 million of infrastructure renewals expenditure, was £816 million. UU is sharing net outperformance through additional investment in resilience available over the remainder of AMP6 from £100 million to £250 million. Capital spend during the period rose to £816.1m (2017 - £803.7m).

Commenting on its Water Plus joint venture with Severn Trent, UU said the JV had experienced an increase in its working capital during the year arising from data and billing issues following market opening. As a consequence, loans owedto the group by Water Plus have increased by £17 million to £136 million.

The water company said it is delivering value through greater use of innovation and advanced technology in its record-breaking five year £3.8bn AMP6 capital investment programme. It also expects to invest up to £100 million in non-regulated projects, subject to acceptable returns. In the first three years of AMP6 UU has invested £59 million in non-regulated projects, primarily in solar power.

On operational progress, United Utilities said innovation like advanced technology, data management and energy efficiency, coupled with its innovative Systems Thinking approach is enabling it to better manage its huge geographically complex networks centrally as one smart integrated system via an Integrated Control Centre

Investing in technology and infrastructure has enabled the water company to capture huge volumes of data from its assets and the surrounding catchment and to focus on the interactions of the constituents of the system on a much larger scale.

The utility said this “radically different” approach is delivering enhanced levels of service and resilience along with sustainable improvements in efficiency and is on track to deliver £100 million of totex savings in the current regulatory period.

UU's asset optimisation programme is continuing to provide the benefits of increased and more effective use of operational site management to optimise power and chemical use and the development of more combined heat and power assets to generate renewable energy.

In addition to the electricity the utility generates from bioresources, it is also developing other renewable energy facilities, primarily in the area of solar, where UU has invested £53 million in the first three years of AMP6. The water company has generated more renewable energy this year than ever before, at 167 gigawatt hours, up 12 per cent on 2017.

UU is on track with its aim of reducing its carbon footprint by 50% by 2020, compared with a 2005/06 baseline – this year it has reduced to 391,640 tonnes of carbon dioxide equivalent, a reduction of one-third since 2005/06.

Commenting on the results, Steve Mogford, Chief Executive Officer, said:

“We continue to put customers first. Our approach to vulnerability and affordability is setting new benchmarks for the industry and our sustained improvement in customer satisfaction positions us as a leader in the sector. This year, we achieved our best ever scores against Ofwat’s qualitative Service Incentive Mechanism (SIM), positioning us first in the industry in the final survey of the year.”

“Our approach to innovation and Systems Thinking is radically changing the way we operate and leading the way for the industry. We are using advanced technology from around the world and across different sectors to deliver better service, greater resilience and improved efficiency. This is contributing to outperformance in the current regulatory period which we are sharing with customers in the form of £250 million of additional investment in resilience projects.”

He added that United Utilities is confident it can rise to the longer-term challenges resulting from a growing population, affordability concerns and the impact of more volatile weather.