FY20 in line with expectations UU reported FY20 this morning. Underlying operating profit of £744m (INVe £739m, cons £738m), underlying EPS 63p (INVe 63.2p, cons 62.9p) & net debt of £7.361bn (INVe £7.352bn, cons £7.298bn). The dividend of 42.6p is in line with our estimate. £56m of Covid-19 costs As with Severn Trent, UU has written down its share of the Water Plus JV to nil, and reflected Covid-19 losses in FY20 for this business. At a group level, £56m of Covid-19 costs have been taken in FY20, of which £37m relate to Water Plus, £18m relate to a higher risk of non-payment of household bills, and £1m relates to operating expenses. These have all been treated as adjusted items by UU. Words of caution regarding the dividend policy for AMP7 UU has issued words of caution as far the outlook is concerned, stating that “It is, however, too early to predict the full impact of COVID-19 on inflation, the economy more generally and on our business, and we will review our dividend policy for AMP7 as a clearer picture of the post COVID-19 economic environment emerges”. The policy is currently CPIH growth through AMP7 to 2025. We have previously stressed that legitimacy is all important for businesses that sit astride the private/public divide, and we suggest that given the many unknowns as to the shape and pace of the economic rebound, allied with the possibility of more regulatory levers being pulled, that UU has used an appropriate form of words. Nonetheless, it serves to highlight that there are risks for stocks considered to be ‘safe havens’.