British group United Utilities (UU.L) forecast an increase in annual revenue and raised its five-year investment plan on Thursday, sending its shares to a record high.
The country's water sector as a whole has come under public pressure to improve infrastructure as the sector's largest company Thames Water has been the subject of environment agency fines and legal cases.
United said its higher 11.5-billion-pound ($15.51 billion) investment plan would support housing, data centres and clean energy development, while creating 4,000 jobs.
EQUITY RAISE OF 800 MILLION POUNDS
United, whose previous planned investment was 9 billion pounds, said it has submitted a 1.4 billion‑pound proposal to the industry regulator Ofwat, adding that it aims to fund part of the investment through an equity raise of 800 million pounds.
The company will sell around 9% of shares at about 1,279 to 1,312 pence per share, updates from bookrunners showed, implying a discount of up to 2.5% to Wednesday's close.
Shares in the utility serving North West England rose by as much as 11.7% at 1,465.5 pence. Rivals Pennon (PNN.L) and Severn Trent (SVT.L) also jumped 5.8% and 6.5%, respectively.
United expects underlying revenue of between 2.7 billion pounds and 2.8 billion pounds for the year ending March 2027, compared with 2.58 billion pounds in the previous year.
"At first glance, we see the higher growth, coming with a robust balance sheet, as positive for United Utilities and the broader water sector," Jefferies analyst Ahmed Farman said in a note.
Plans for a further 1.2 billion pounds of investment are expected to be submitted in 2027 and 2028, United said.
"Operationally, we are making real progress on the issues that matter most, including significant reductions in storm overflow spills and sewer flooding, alongside strong customer service performance," CEO Louise Beardmore said.
United's underlying profit after tax for the year ended March 31 jumped 42.2% to 730 million pounds.
($1 = 0.7413 pounds)
