United Utilities PLC has unveiled an £800 million equity raise intended to provide the shareholder-funded portion of a larger AMP8 investment plan. The company says the offering represents approximately 9% of its market capitalisation and will support an elevated capital expenditure programme across the next regulatory period.
Under the revised plan, total AMP8 investment will rise to £11.5 billion, up from the previous £9 billion target. That change reflects an incremental £2.5 billion of additional capital expenditure scheduled across the fiscal years 2025 to 2030.
Management projects that the increased spending will accelerate growth in the regulatory asset base - lifting the expected compound annual growth rate to about 10% through 2030, compared with a prior expectation of roughly 7%.
The group's financial framework has also been amended, with management now aiming for regulatory returns in the 10-11% range. Company commentary describes this revised return target as being around 100 basis points higher than earlier guidance.
The equity issuance will be carried out through new ordinary shares with a nominal value of 5 pence each. The transaction includes a £400 million cornerstone commitment as part of the placement.
United Utilities has stated that the equity proceeds are earmarked specifically for the equity portion of the incremental capital expenditure associated with the higher AMP8 programme. Company guidance indicates an expectation to keep gearing inside a 55-65% target range for the duration of AMP8.
Investors will therefore see the company increase both the scale of planned infrastructure investment and the financial targets that accompany it, while using an equity issuance to fund the additional equity requirement of the expanded capital plan. The move frames the enlarged AMP8 programme, the updated regulatory-return objective and the companys stated gearing target as interlinked elements of its finance and investment strategy.
Summary
United Utilities is raising £800 million via a new share issue - roughly 9% of market capitalisation - to fund a £2.5 billion uplift in AMP8 capex, taking total AMP8 investment to £11.5 billion for fiscal years 2025 to 2030. Management expects the higher spend to raise RAB growth to about 10% CAGR to 2030 and has increased its regulatory return target to 10-11%. The share issue comprises new 5 pence ordinary shares and includes a £400 million cornerstone commitment; the company expects to maintain gearing between 55-65% through AMP8.