Investors advised to drip feed as United Utilities’ regulator response looms

As United Utilities reports a half year trading update Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors.

“United Utilities reported trading to be in line with expectations this morning with operating profit for the first half expected to be flat. Investors’ focus will be on the confirmation that the water utility company continues to be in talks with Ofwat regarding its draft proposal for the next five year period, expected to be announced in mid-December. The company had its proposed pricing structure rejected by the regulator last month and is expected to respond by 3 October. Investors will be hoping for some agreement.

“We continue to recommend United Utilities for income seekers as it offers investors an attractive yield of around 4.4%. However, so close to the Ofwat response and with the new regulatory period looming we recommend investors drip feed for the time being.”