United Utilities, the North-west water and electricity group, has put the £500m flotation of its outsourcing business, Vertex, on the backburner.
The company had pencilled in a stock market listing next year for Vertex, which provides call centre services for clients including Powergen, Westminster City Council and the Department for Work and Pensions. But yesterday it said there was no longer any timetable for a flotation and that much would depend on the state of the equity markets.
John Roberts, UU's chief executive, said: "Two years ago there was a huge gap in the valuation of utility companies and businesses like Vertex but now that difference isn't there to anything like the same extent. At the moment it is not in shareholders' interests to sell Vertex. If market conditions go back to where they were then it obviously would be."
He was speaking as UU reported an 8 per cent increase in pre-tax profits for last year to £328m as growth in its support services businesses more than offset a profits decline in its core regulated water and electricity divisions.
UU also said the order book for its support services division now stood at £4.5bn - including £2.5bn in its infrastructure management division which has deals with Glas Cymru's Welsh Water, Scottish Water and British Gas. The group expects its telecoms business, Your Communications, to become cash positive this year.
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