United Utilities has raised its cost savings target to GBP450 million by 2005.
UK multi-utility United Utilities is adopting a different strategy from many of the other water companies. In many cases the tough price controls set by the regulator have encouraged water companies to undertake financial restructuring and separate the ownership of the assets from the operation. However, in this case the company is hoping to achieve efficiencies through its multi-utility operations.
To date the company is ahead of plan, with savings achieved through simplified management structures, effective use of IT and rationalization of its property portfolio, and is expecting to announce full year results shortly that are in line with expectations, following disappointing half year results (excluding the disposal of its energy supply arm) which were 28% below the previous year’s.
Hopeful of increased synergies through its multi-utility operations, the company has raised its cost savings target for the end of March 2005 by 12.5% from GBP400 million to GBP450 million – and hopes to surpass this. The company is also aiming for growth in the telecoms sector in particular where, in the year to 31 March 2001, it has invested GBP180 million, of which GBP9 million was for four broadband licenses, and it expects to achieve growth of over 40%.
