Utilities, United, Service, Customer, Efficiency

United Utilities - Customer service and efficiency targeted

01 Dec 2004 | (Case Study)

Improving customer service and increasing efficiency are to be at the heart of United Utilities’ plans to meet the challenges of its next five-year investment period from April, 2005.

While the multi-utility business is awaiting final proposals from the water regulator, Ofwat, and electricity counterpart, Ofgem, as to the scale of investment it can make on the water, wastewater and electricity network in the North West up to 2010, its plans are already well advanced.

A new computer system – which will combine its water, wastewater and electricity processes – is set to transform the way United Utilities handles  service calls from its millions of customers across the region and responds to their needs.

The company today announced a strong set of results with improved performance across all its business units. Profit and turnover have both increased by 13 per cent to £193 million and £1.2 billion respectively. The interim dividend is to increase by 2.5 per cent to 14.79 pence per ordinary share.


Chief Executive John Roberts said: “I am pleased to announce another six months of significant growth, continuing the trend of consistently improving performance. As well as increasing operating profits, our support service businesses have secured contract wins with an expected total value of £3 billion.

“Looking ahead, there are a number of significant challenges in our regulated businesses. We believe we have the right plans in place to meet them.

“Overall, we are determined to achieve continued growth in our profits, as well as improving our customer service and exceeding our environmental obligations. These are significant challenges, but we are sure we have the staff, the structure and the systems to succeed.”

The company announced that turnover in the licensed water, wastewater and electricity business, based within the North West, rose 6 per cent to £683 million and operating profit rose by 12 per cent to £285 million, driven largely by the allowed real price increase of 8.9 per cent for its water and wastewater charges, offset by a 3 per cent real price reduction for United Utilities Electricity.

Turnover in its support services businesses – which includes the business process outsourcing company, Vertex, and its infrastructure asset management arm, Contract Solutions – has risen by 20 per cent in the first half, to £567 million. These businesses contributed around £85 million of operating profit to the group over the last 12 months, compared to break-even just four years ago.

During the last six months, Contract Solutions was named as preferred partner to provide operations, maintenance and shared services to Dwr Cymru Welsh Water for the next 15 years in a contract worth up to £1.5 billion.

Vertex also recently announced a new 15-year contract, worth up to £427 million, to provide a range of services to Thurrock Council. For the first time, Contract Solutions will work alongside Vertex providing facilities, property management, highways engineering and transportation services as part of the deal.

In August, United Utilities conditionally agreed to take a 15 per cent stake in a consortium that has agreed to buy the North of England gas distribution zone from National Grid Transco.

The company today announced that it has been selected as preferred bidder for the contract to operate this gas network on behalf of the consortium, which is expected to be worth around £1 billion for an initial period of eight years.

This contract will boost United Utilities’ support services order book to £7 billion.

Its Manchester-based telecoms business, Your Communications, is now one of the largest alternative network business telecoms providers in the UK. It has delivered organic turnover growth of 11.5 per cent during the period. Including the successful integration of Eurocall, Your Communications has delivered a 41 per cent increase in turnover and a 47 per cent reduction in operating loss compared to the first half last year. It is targeting to generate an operating profit from the second half of 2004/05.

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