Profits hit by £25 million due to water bug, says United Utilities

<p>The company will pay compensation to 300,000 households after a parasite was discovered in the water supply last month.</p>

United Utilities has predicted that its profits will be hit by around £25 million this year, after paying compensation to up to 300,000 homeowners in Lancashire.

In August, customers had to boil their tap water after a microbial parasite called cryptosporidium was discovered in the water supply. The bug, which was found at a treatment works in early August, can cause diarrhoea and abdominal cramps. 

People in Blackpool, Chorley, Fylde, Preston, South Ribble and Wyre were affected and had to boil their drinking water for more than two weeks while the company dealt with the problem.

Not enough clarity

At the time, South Ribble MP Seema Kennedy criticised how the utilities company responded to the incident, saying that there should be more clarity about when the water supply would be safe again.

"This situation has now been going on for 18 days and I keep asking United Utilities when is an end date in sight because people need to plan," she said on August 24th.

"At the beginning, we had this notice and we thought it would be a matter of a couple of days or a week," she added.

Compensation

United Utilities said it was grateful for the patience of its customers, and the firm started sending out compensation – between £50 and £60 per household earlier this month.

In a trading update, the firm said: "We deployed extensive additional resources, including enhanced UV treatment, to restore the water quality to the high standards expected as quickly as possible, and full service was restored in early September."

The company added: "We recognise the inconvenience this placed on many of our customers and are very grateful for their patience and understanding."

According to analysts, United Utilities may also be facing regulatory performance penalties, which would add to the costs already incurred dealing with the problem and paying out the compensation.

The firm, which is the UK's largest listed water company and provides water and sewerage services for around seven million people in north-west England. On Wednesday (September 23rd), shares in the company were up 1.77 per cent to 892.00 at 16:10 BST.

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