United Utilities' chairman Sir Richard Evans has issued an annual trading update, saying the company delivered "good" profit growth and operational improvements.

In the 12 months ending March 31st, Warrington-based United Utilities addressed the group's portfolio, sold its electricity business for a "substantial premium" and announced a new dividend policy.

Current trading is in line with the group's expectations and is on course to return about £1.5 billion to shareholders.

"The group has had a successful year," stated Sir Evans.

"Consistent with our previous policy of growing dividends in line with inflation, the board is proposing to increase the final dividend by 3.87 per cent compared with the previous year."

United Utilities holds a £1.5 billion contract to operate the northwest's electricity distribution network until 2015.

Last month, the company announced it intends to build a 54-kilometre underground pipeline from Liverpool to north Manchester to move water around the northwest more efficiently.

The £125 million project, which is expected to take two years to complete, will carry up to 100 million litres of water a day.