Market's view on United Utilities
Published on April 2024
- United Utilities fined £800,000 for illegally abstracting 22 billion litres of water from the Fylde aquifer in Lancashire during dry weather in 2018, impacting river flows and the aquifer recovery.
- Six water companies faced claims of underreporting discharge into rivers and seas and overcharging customers, described as “privatised monopolies.”
- Thames Water under severe financial strain, drawing up emergency plans for possible government nationalisation to manage £14 billion debt; this follows performance issues, leaks, and sewage contamination.
- Concerns discussed regarding why water companies distribute large dividends despite having significant debts.
- The House of Commons Committee report in 2022 highlighted no English river free from chemical contamination and poor ecological status of UK rivers.
- Discussion on the financial resilience of the water sector, highlighting the ongoing scrutiny by Ofwat and governmental bodies.
- Mention of potential significant increases in water bills to address infrastructure issues, with an estimated £50 billion needed over the next 25-30 years for sewage overflow solutions.
- Observations on share trading influenced by media reports and sector-wide issues, with some stock watchers opting to sell shares due to perceived risk.