19 March 2010

Warning from water firm

09/12/2008

United Utilities, the FTSE 100 water giant supplying almost seven million people in the North West of England, has warned that it could face difficulties in financing the upgrading of old pipes, if regulators fail to adjust water prices with the impact of the credit crunch in mind.

When it sets prices for 2010-15, industry watchdog Ofwat has been urged by United Utilities to take into account the rising financing costs for infrastructure that it will have to absorb.

Next year, the industry regulator is due to set the level of return that players in the water sector can make, and the companies have to submit detailed business plans in advance.

Philip Green, CEO of United Utilities, has pointed out that water companies could face problems in upholding positive credit ratings, if the regulator fails to heed their concerns. Furthermore, he argued that the financial crisis has made it impossible for water ventures with downgraded credit ratings to raise the cash needed to replace pipes or tackle floods.

‘The current turbulent financial markets,’ opined Green, ‘make it doubly important to maintain strong investment-grade ratings.’

A first plan submitted in August by United Utilities predicted that water prices should rise by an average of 2.7 per cent annually between 2010 and 2015.

Ofwat says it will arrive at its decision based on the ability of companies to be efficient and offer value for money. ‘We’ll set price limits at a level that will enable an efficient company to deliver the right outcomes at the right time,’ it said in a statement.

Sector: Gas, Water & Multiutilities

Subscribe today

£7,277

That’s what you would have in your portfolio if you had invested £6,000 into the six Company Watch recommendations in our April 2009 issue.

Subscribe now and receive a 50% discount

Free – Latest Stock Recommendations

Free access to the latest AIM stock recommendations and news from the award-winning Growth Company Investor team. Receive our tips on what stocks to buy direct to your inbox every Tuesday and Friday. Find out more today.

Select your level of risk and we select the funds

Cautious? Positive? Adventurous? Choose between three levels of risk for a fund of funds from Sharefunds, our sister company. Click here for more information.

The AIM Guide 2009/10

The brand new, fully updated AIM Guide 2009/2010 is now available to purchase. AIM Guide is the only fully comprehensive guide to AIM and is regarded as 'must-have' for any serious investor or professional interested in the market for young, fast-growing companies.   Order your copy today and benefit from a £10 discount!

VCT Special Report 2009

This report's principal aim is to provide business owners seeking funding with information about the amount of funds that VCTs have to invest. Click here for more information.

Cash Shells Special Report 2009

Business XL, the award-winning monthly magazine for growing companies, is delighted to announce the launch of a new study on cash shells. The research provides a comprehensive overview of cash shells on AIM, companies that have become a significant feature on the AIM landscape. Buy the Cash Shells 2009 Research Report today or email Halid Delkic to obtain a free two-page abstract.

Growth Company Features, Research and Analysis

In-depth coverage of selected AIM companies within the small-cap and fast growing company sector including AIM and PLUS Markets shares and listed stocks. Company research and analysis from GCI analysts updated daily.

Popular Features

Latest Features

PLUS news 11/03/2010

Retail-focused stock exchange PLUS has regaled investors again with news of upbeat trading volumes during January.

AIM news 11/03/2010

The AIM All-Share index dipped and rose slightly but essentially failed to move much over the course of February, starting at 667.27 points and closing at 667.24 as the market took a breather.

Sector: Support Services

Companies: Eatonfield , OPG Power Ventures , Intandem Films , Glisten

Sector: Retail 11/03/2010

Snowfall fails to help retail recovery

Sector: General Retailers

More Features

Sectors

Vitesse Media Events