United Utilities is a British Utility company which owns and operates the water network mainly in the North West of England. It serves around seven million people in England and is considered to be the largest water listed company in the UK. The reason our group considers United Utilities as a major competitor to Severn Trent PLC is the competitiveness of the utility companies in the UK. Although United Utilities does not compete with Severn Trent PLC directly as Severn Trent PLC mainly serves areas around the Midlands of England and also certain regions of Wales. They remain close competitors as both companies strive to expand their market shares in their individual area where they mainly provide water. Both company also remain competitive in other non regulated services in different utility sectors such as waste water management, gas network and electricity sector. By assessing the share price movements between Severn Trent Plc and United Utilities which is shown in the plotted diagram, the movements shows the similarities of both companies throughout the study period. The first clear example would be the sudden increment of share price in between the November and December 2009 period. In this period, both companies share price increased almost at the same date and by the same amount. This is due to the released of sound set of interim financial results by both companies. Both companies recorded an increase of profit before tax which increased by 6% and 9.8% for United Utilities and Severn Trent Plc respectively. After this period both companies did not show any significant changes in share prices and both companies share price movement remain closely similar till the starting period of February 2010 when both share a similar drop in share prices. This drop was not a result of any economic event but was due to the adverse weather occurring around UK which caused an increased in leakages and damages to both companies which in turn raises...
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