City eyes on water firm’s trading report

Photo Neil Cross United Utilities installing an ultra-violet rig
Photo Neil Cross United Utilities installing an ultra-violet rig
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A clue to the true cost of the cryptosporidium in the water crisis may be revealed tomorrow when United Utilities delivers a trading update.

It will be the first the Warrington-based company has made since the parasitic bug infected Blackpool and Fylde water supplies on August 6.

The company started sending out cheques for compensation payments ranging from £50 to £60 earlier this month to 300,000 households in Lancashire.

Homes and businesses in parts of the county were warned to boil their water before use after traces of the microbe were found at the Franklaw water treatment works at Catterall, Wyre.

United Utilities flushed the system clean and installed ultra violet ray equipment to kill off remaining traces of the bug at local reservoirs.

It was a month before customers received the all-clear and Fylde coast businesses are calling for compensation for loss of custom and for having to use bottled water throughout the period.

Analysts at Bernstein expect it to result in a total pay-out bill of £21m.

Societe Generale experts said investor uncertainty “had been stoked by water quality issues in Lancashire” and saw the total bill also including regulatory performance penalties totalling £60m.

But they pointed out this was just one per cent of United’s market value of £6bn.

The group provides water and sewerage services for around seven million people in north west England.

Underlying operating profit for the year to the end of March rose 5 per cent to £664m.

Chief executive Steve Mogford said at the time of annual results in May that customers would see “significant levels of investment, improved service and below inflation growth in average household bills” for the period to 2020.