United Utilities Trading Update

United Utilities Group PLC

25 March 2010

                        UNITED UTILITIES TRADING UPDATE                        

United Utilities Group PLC today issues an update on trading for the year
ending 31 March 2010. The company will announce its full year results on 21 May
2010.

Commenting on the group's trading position, Philip Green, Chief Executive,
said:

"The group is on track to deliver a sound underlying financial performance for
the year ending 31 March 2010. We continue to benefit from a robust financing
position and have headroom to cover our projected financing needs through to
early 2012.

"We are well prepared for the 2010-15 regulatory period. With the extensive
efficiency plans we are implementing and the low cost of the group's debt
portfolio, we believe we can deliver outperformance across a broad range of
areas. We will continue with our strong focus on operational performance and
cost efficiency and aim to build on the improvements already achieved."

Regulated activities

The regulated business is expected to deliver a modest increase in underlying
operating profit for the year ending 31 March 2010, reflecting the allowed
price rise partly offset by lower water demand and ongoing cost pressures in
areas such as power and bad debts, as indicated previously. This allowed price
rise is to help fund major investment in the company's assets on behalf of its
customers and the environment.

Capital expenditure is expected to total over £600 million for the year,
including infrastructure renewals expenditure, consistent with the company's
planned investment profile for the 2005-10 period.

Looking ahead, United Utilities Water (UUW) has been allowed a capital
investment programme of £3.6 billion (2007/08 prices), for the 2010-15
regulatory period, which will drive real growth in the regulatory capital value
of 12% across the five years. UUW's contractor partners are in place and the
company is well set for delivery of the forthcoming capital investment
programme. UUW expects capital investment, including infrastructure renewals
expenditure, in 2010/11 to be substantial as the company aims for a smoother
capital delivery profile across the five year period compared with 2005-10.

United Utilities has a continuing focus on operational performance and cost
efficiency and is implementing a range of business improvement initiatives and
cost control measures across the group, as it aims to lower the cost to serve
its customers whilst maintaining and improving levels of service. Customer
satisfaction, in response to enquiries, continues to improve and the company is
on track to record its highest satisfaction score for many years.

Non-regulated activities

During the period, United Utilities disposed of its investment in Northern Gas
Networks Holdings Limited (NGN) for approximately £86 million and sold its
economic interest in Manila Water Company (MWC) for approximately £44 million.
The intention is to retain these proceeds within the group. As a result of the
disposals, dividends from these investments, which are included in operating
profit, are expected to be materially lower in 2009/10 compared with
approximately £12 million received in 2008/09.

Adjusting for the impact of these disposals, the non-regulated business is
expected to deliver good underlying operating profit growth for the year ending
31 March 2010 reflecting tight cost control and a strong performance from its
international activities.

Following the outcome of the recent water price review, Welsh Water announced
in February 2010 that it intended to take operations and maintenance services
in-house and therefore the current contract with United Utilities will not be
renewed for the 2010-15 regulatory period.

Following the sales of its holdings in NGN and MWC, United Utilities has
received several expressions of interest for its non-regulated activities.
Although no decision has been taken to sell any further non-regulated
businesses, the group is continuing to evaluate these expressions of interest
and will update the market in due course.

All other segments

The group's other activities, which include United Utilities Property Services
(UUPS) and central costs, are expected to make a small underlying operating
loss for the year ending 31 March 2010. As indicated previously, difficult
conditions in the UK property market have affected the performance of UUPS, the
property sales and management business of the group.

Other financial

The group continues to benefit from a robust financing position and has
headroom to cover its projected financing needs through to early 2012. The
average term to maturity of the group's long-term debt portfolio is over 25
years, which helps reduce refinancing risk. During the year ending 31 March
2010, United Utilities raised £220 million through the issuance of new bonds,
extended committed banking facilities and in January 2010 repaid a £150
million, 5.25% bond.

Borrowings, net of cash and short term deposits and derivatives, at the year
end are expected to be similar to the position at 30 September 2009, subject to
no material further fair value movements. This principally reflects expenditure
on the regulatory capital investment programmes, payment of the 2009/10 interim
dividend and payments of interest and tax, offset by operational cash flows and
the cash inflow from the divestment of United Utilities' holding in NGN and the
sale of its economic interest in MWC.

United Utilities has approximately £2 billion of long dated, index-linked debt
at an average cost of 1.8% real. In line with its policy, the group has now
also fixed the interest rates on a significant proportion of the remainder of
its existing debt portfolio, for the 2010-15 regulatory period, at an average
nominal rate in the range 5.0% to 5.5% (inclusive of credit spread). This
provides more clarity on UUW's ability to outperform the final determination.

As outlined previously, the group received a one-off cash tax inflow during the
first half of the year of £51 million, following agreement with UK tax
authorities of prior years' tax returns. Excluding the impact of prior year
adjustments, which incorporate this one-off item, the total effective tax rate
for the year, in respect of continuing operations, is expected to be around
28%.

As part of the group's efficiency programme, one-off restructuring costs in the
order of £30 million are expected in the year ending 31 March 2010, of which £
11 million was recognised in the first half of 2009/10.

As indicated previously, United Utilities is currently reviewing its defined
benefit pension provision and expects to provide further details later in the
year.

Dividend

In line with United Utilities' existing policy to grow dividends by RPI+2% per
annum, the board expects to grow the final dividend for 2009/10 by 5%. The
final dividend for 2009/10 is therefore forecast to be 23.13 pence per ordinary
share. Together with the interim dividend of 11.17 pence, this provides a
forecast total dividend per ordinary share for 2009/10 of 34.3 pence.

As outlined in January, following detailed analysis and assessment of the final
determination, the board intends to rebase the dividend per share to 30.0 pence
for the 2010/11 financial year. Thereafter, the intention is to continue to
target a dividend per share growth rate of RPI+2% per annum through to 2015.

United Utilities contacts:

Philip Green, Chief Executive                            [phone]    
                                                                               
Tim Weller, Chief Financial Officer                      [phone]    
                                                                               
Gaynor Kenyon, Communications Director                   [phone]    
                                                                               
Darren Jameson, Head of Investor Relations               [phone]    
                                                                               
Rob Hughes, Investor Relations Manager                   [phone]    
                                                                               
James Bradley / Tom Murray, Tulchan Communications       [phone]  

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