United Utilities announces best ever SIM score
United Utilities has announced that it has achieved its highest service incentive mechanism (SIM) score in its latest trading update.
UU said "further improvements in customer satisfaction over the year and a step change in performance since the start of AMP6" had resulted in its best performance yet in Ofwat's SIM measure, which was introduced in 2010 as a means of encouraging companies to improve customer service.
"This has been achieved through a strong customer focus, combining higher levels of investment to improve resilience, greater use of technology to deliver better customer service and our leading approach to supporting vulnerable customers," the company said.
It said the SIM score positions the company first in the final wave and achieves an upper quartile position for the year overall.
It said: "This performance is mirrored across other customer satisfaction metrics including an upper quartile performance in the UK Customer Satisfaction Index covering all industries and we are the leading listed company for the Consumer Council for Water's customer satisfaction research."
UU said it is on track to deliver its PR19 business plan in September and expects to deliver against Ofwat's key themes of customer service, affordability, resilience and innovation, adding: "These are not new for us in the way that we run our business and have been areas of focus for us for some time. Indeed, in many of these areas we are a leader in the industry and already have plans in place to build on this in AMP7 and beyond."
United Utilities, which also drew attention to its status as an 'Industry Leading Company' in the Environment Agency's annual assessment, is due to reveal its full annual financial results on 24 May 2018.
However, it said: "Group revenue is expected to be slightly higher than last year, reflecting our allowed regulatory revenue changes, partly offset by the accounting impact of our Water Plus business retail joint venture, which completed on 1 June 2016.
"Underlying operating profit for 2017/18 is expected to be moderately higher than 2016/17. Infrastructure renewals expenditure (IRE) has increased slightly in the second half of the year, although full year IRE for 2017/18 is expected to be similar to last year.
"RPI inflation has increased this year which is expected to increase the company's regulatory capital value (RCV) by around £400 million. Since United Utilities is well hedged for inflation, there is also an impact of higher RPI inflation on our index-linked debt and we expect the underlying net finance expense for 2017/18 to be around £40 million higher than last year.
"As the company continues to invest in its asset base, we expect a small increase in group net debt at 31 March 2018 compared with the position as at 30 September 2017.
"Our responsible approach to financial risk management continues to deliver benefits including a strong balance sheet, a stable IFRS pension surplus and gearing comfortably within our target range of 55% to 65% net debt to RCV, supporting a solid A3 credit rating for United Utilities Water with Moody's."
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