Trading Statement

United Utilities Group PLC

24 March 2011

                        UNITED UTILITIES TRADING UPDATE                        

United Utilities remains on track to deliver a solid underlying financial
performance for the year ending 31 March 2011, with performance continuing
slightly ahead of management expectations. The company will announce its full
year results on 26 May 2011.

Regulated activities

Regulated revenue has continued the positive trend experienced in the first
half of 2010/11. However, as expected and outlined previously, it is
anticipated that regulated revenue will be a little lower in the second half of
the financial year, compared with the first half, reflecting seasonality.

In line with the planned phasing of the capital investment programme, it is
expected that infrastructure renewals expenditure and depreciation will be
higher in the second half of 2010/11 compared with the first six months of the
financial year. Total regulatory capital expenditure is expected to amount to
over £600 million for the year, including infrastructure renewals expenditure,
consistent with the company's planned investment profile for the 2010-15
period. This is good progress, reflecting the company's detailed advanced
planning, and represents a significant increase in capital investment compared
with the first year of the previous five-year period when £441 million was
invested.

As expected, regulated underlying operating profit is therefore anticipated to
be somewhat lower in the second half of 2010/11, compared with the first half,
although the full year position represents a healthy financial performance in
light of the impact of the price review.

The prolonged freeze experienced across the UK in December 2010, and the
subsequent thaw, inevitably resulted in an increased number of leaks across
United Utilities' network.  However, the outstanding effort and commitment
demonstrated by the group's employees ensured that the impact on customers was
minimal and additional costs associated with the adverse weather were not
significant. Nonetheless, these very difficult operating conditions have made
the achievement of the company's 2010/11 regulatory leakage target extremely
challenging, although the company has met its target in each of the last four
years. 

All other segments

Following completion of the non-regulated disposal programme, all other
segments principally comprises United Utilities Property Services, the
non-appointed activities of United Utilities Water and the contribution from
the group's 35.3% holding in Tallinn Water, as well as certain central costs.
This segment is expected to make a small underlying operating profit for the
year ending 31 March 2011.

Other financial

The group continues to benefit from a robust financing position and now has
headroom to cover its projected financing needs through to early 2013. Earlier
this month, United Utilities supplemented its funding position by agreeing
terms on a new £200 million index-linked loan facility with the European
Investment Bank with an average term of c11 years.

Borrowings, net of cash and short term deposits and derivatives, at the year
end are expected to be slightly lower than the position at 30 September 2010,
subject to no material further fair value movements. This principally reflects
operational cash flows and the cash inflow from the non-regulated disposals
which completed during the second half of the year, offset by expenditure on
the regulatory capital investment programme, payment of the 2010/11 interim
dividend and payments of interest and tax.

The total current year effective tax rate on continuing activities, excluding
the adjustment relating to deferred tax in the first half of the year as a
result of the staged reduction in the rate of corporation tax, is expected to
be broadly in line with the mainstream rate of corporation tax of 28%.

As part of the group's efficiency programme, one-off costs of £16 million were
recognised in the first half of the year. This figure is expected to reduce
slightly for the full year, principally reflecting the fact that actual
restructuring costs were a little lower than expected.

United Utilities contacts:

Gaynor Kenyon, Communications Director                   [phone]    
                                                                               
Darren Jameson, Head of Investor Relations               [phone]    
                                                                               
James Bradley / Tom Murray, Tulchan Communications       [phone]  

This announcement is also available at: http://www.unitedutilities.com