High level picture unchanged UU’s trading statement issued this morning indicates a performance for FY21 in line with management expectations. The ODI reward of up to £20m was already disclosed at the recent capital markets event. Previously issued guidance was for a volume/Covid impact of £10-60m, with revenue guidance of £1.75-1.8bn. UU is now pointing to a c.3% reduction in revenue, suggesting that revenue will outturn above at the upper end of the range, and above our £1.7bn. Lower revenues and higher IRE costs point to lower underlying operating profit, and our estimates point to a 9.8% drop. No indication has been given as to the magnitude of the equity accounted loss at Water Plus, UU’s business retail JV with Severn Trent. UU has indicated that it will be amending its approach to alternative performance measures at year-end, notably in respect of underlying earnings. We are speaking to the company later, and will discuss the changes. These changes do not impact cash flow. UU has pointed to a small increase in net debt vs. the September ‘20 position of £7.4bn. Our year-end forecast of £7.5bn is consistent with this direction, but does not include the €100m proceeds from the sale of UU’s 35.3% in Tallin Water.