UPDATE 1-United Utilities boosted by price rises

Wed Nov 28, 2012 5:45am EST

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LONDON, Nov 28 (Reuters) - United Utilities said price rises had enabled it to report higher revenues on Wednesday, keeping Britain's largest listed water utility on track to meet its targets.

Revenue increased 3.8 percent to 823 million pounds ($1.3 billion) in the six months to end-September, thanks to a 5.8 percent price increase permitted by British water regulator Ofwat.

Ofwat recently set out proposals to give it greater scope to set different price limits, a move that has proved unpopular with many of the water firms.

"We are unable to accept the flexibility that they've proposed in the licence modifications, because of the uncertainty that that generates and also the potential for that uncertainty feeding into customer bills," chief executive Steve Mogford said on a conference call to reporters on Wednesday.

The company said it was on track to deliver targets that include 300 million pounds of financing outperformance, despite a tough economic environment.

Brits are struggling with stubbornly high inflation, stagnant wages and rising long-term joblessness, which have impacted customers' ability to pay.

"The North West faces a particularly tough economic environment, with unemployment having increased at a faster rate than any other UK region in 2011/12, resulting in an adverse impact on ability to pay this year," the company said.

The company reported underlying operating profit down 8 million pounds to 316 million, broadly in line with estimates. It attributed the drop to increased infrastructure expenditure following last year's transfer of responsibility for private sewers to wastewater companies.

Shares in the company rose 1.7 percent to 681 pence at 1037 GMT, outperforming the FTSE100, down 0.26 percent.

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