Water supplier United Utilities has announced that its 2023/24 financial guidance will remain broadly unchanged, despite reporting that its performance had been affected by storms and high levels of rainfall.

The group has previously stated that its revenue is to rise by around £150m from a base of £1.8bn, largely driven by inflation-linked increases in the firm’s revenue cap, as well as an uplift in consumer consumption levels.

United Utilities, which provides water and wastewater services in the North West of England, stated that annual rainfall levels in 2023 were “exceptionally high” across the region, with parts experiencing rainfall up to 50% higher than 2022, and up to 33% higher than the long-run average.

There have been 14 named storms since the start of 2023, of which nine have occurred since the end of September. This weather has adversely impacted United Utilities’ 2023/24 outcome delivery incentive (ODI) performance by around £25m, and the group stated that its net ODI outperformance is expected to be around £40m for 2023/24.

Hargreaves Lansdown equity analyst, Aarin Chiekrie, commented that United Utilities is “handling the pressure of an uncertain macroeconomic backdrop well”.

“United Utilities had previously been on track to deliver its best-ever year on customer ODIs, which are effectively bonuses for delivering above and beyond their committed levels of service,” Chiekrie said.

“ODIs now look set to come in at around £40m for the full year, which is £25m lower than the group previously expected. Still, this should go a long way to offsetting the roughly £60m higher underlying operating costs the group’s anticipating this year, with power, labour and chemical costs being called out as the main bugbears at the half-year mark.”

United Utilities will report its full-year financial results for 2023/24 on 16 May.

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