Annual report and financial statement 2009 - United Utilities

Business reviewTogether with the interim dividend of10.64 pence per ordinary share, thetotal ordinary dividend relating to theyear is 32.67 pence. The final dividendis expected to be paid to shareholderson 3 August 2009.With a consistent strategy in place,I believe we are well positioned to meetthe challenges ahead. I would like tothank our shareholders, employees andcustomers who have given us strongsupport and I hope they will continueto share in United Utilities’ success.DrJohnMcAdam, ChairmanTotal dividendper ordinary share32.67pOfwat is expected to set out its initialthoughts on price limits in July 2009 andits final determination is scheduled forNovember 2009.DELIVERING OURNON-REGULATED STRATEGYWe have continued to look foropportunities to apply our core skills onan asset-light basis. These opportunitiescan generate additional shareholdervalue with little impact on the group’srisk profile.Early in the year we extended the contractwith Southern Water to 2015, whichconsolidates our position as the leadingutility infrastructure outsourcingcompany in the UK. We are also pleasedto have been selected as the preferredbidder for a 27-year municipal solidwaste treatment contract in Derbyshire.In Australia, we have been awarded a20-year desalination operations andmaintenance contract in Adelaide.Further details on how we areperforming on our key prioritiesare provided in the businessreview section on page 6.OUR EMPLOYEESI believe that a committed and motivatedworkforce is central to delivering ourobjectives. Clear goals, appropriate rewardstructures and good leadership are allimportant ways to increase employeemotivation and companies with highemployee engagement tend to be highperforming companies. We survey ouremployees each year to ascertain thelevel of employee engagement and tounderstand the areas where we canimprove. For example, after last year’ssurvey, we took action to increase theaccessibility and visibility of seniormanagement within the business. Weare benefiting from improvements inemployee engagement but, like ouroperational performance, we still thinkthat more can be achieved.OUR ENVIRONMENTAnother key theme that is embeddedthroughout the business is the goal tooperate in a more sustainable manner.As you would expect, we take a long-termview of our operations and we arecommitted to seeking to achieve a 26 percent reduction in our carbon emissionsby 2012. We have also factored into ourbusiness plan ways in which we can adaptto climate change with a strong focus onensuring the continuity of water suppliesfor our customers.OUTLOOKWe expect to deliver a sound underlyingfinancial performance in the final yearof this price review period, although thegroup is experiencing ongoing revenue andcost pressures. United Utilities continuesto benefit from a robust financing positionand has headroom to cover its projectedfinancing needs through to mid-2011.In line with the group’s policy, the boardexpects to grow dividends for 2009/10by five per cent.We will continue to implement our strategyof focusing on our core skills, with theaim of delivering benefits for all of ourstakeholders. I am encouraged by theprogress we have made and confidentthat we can build on this in the year ahead.Philip Green, Chief executive officerunitedutilities.com 5