It has been a good morning for the water utility companies after the regulator Ofwat gave them the green light for a series of price hikes over the next five years. Whilst the increase of 36% is well short of the requested 59% uplift, it does remove a potential overhang from the industry. Popular reaction in the coming days will be closely followed, but shares in United Utilities were close to the top of the FTSE-100 leaderboard in early trade, up by around 1.5%.
The outsourcing specialist Serco issued a trading statement and outlook for 2025 this morning. Despite a modest decline in revenues for 2024 – as had been predicted – management reported a strong rise in operating profits, up 9% for the full year with a heavy weighting of that in the second half. The company is also making significant headway in terms of paying down debt, with a figure of £145m anticipated for the year end, falling to £60m by the end of 2025. At 9am, the Serco share price was up more than 7%.
The vast majority of London listed stocks are trading lower this morning but Wood Group is something of a stand out following its announcement of a contract with for the production of sustainable aviation fuel in Europe. Wood Group will deliver engineering, procurement and construction management to a refinery in Romania, which will be the first such facility in South Eastern Europe. The Wood Group share price was up by around 1% in early trade, although gains are proving difficult to sustain.
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