Vertex helps UU surge to £328m

VERTEX, the fast-growing outsourcing business that is close to landing a £1bn, 10-year deal to run Westminster City Council's customer services operations, will not join this year's rush to the stock market, owner United Utilities has said.

UU chief executive John Roberts ruled out an initial public offering until Vertex matures out of its growth phase. The business, which specialises in call centres, last year increased operating profits 56% to £15m as turnover rose a third to £280 million. Vertex is owned in a joint venture with Ernst & Young Cap Gemini.

Vertex's performance helped lift UU's underlying pre-tax profits by 11% to £328m in the year to 31 March. The total dividend, which makes the North West's water and electricity distribution company the best-yielding stock in the FTSE 100, is up 2% to 47p.

Cost savings of £480m during a five-year UU business plan will offset 3% power price cuts demanded by the regulator. Water rate rises remain banned.