Water bug to cost United Utilities £25m

United Utilities has said its profits will be hit by £25m after paying compensation to up to 300,000 homeowners in Lancashire whose water supplies were affected by a parasitic bug.

Customers had to boil their tap water after cryptosporidium, a microbial parasite was discovered.

The bug, which can cause diarrhoea, was found at a treatment works on 6 August.

United Utilities said it was "grateful" for the patience of its customers.

The company started sending out compensation, which will range from £50 to £60, earlier this month.

In a trading update, external, it said: "We deployed extensive additional resources, including enhanced UV treatment, to restore the water quality to the high standards expected as quickly as possible, and full service was restored in early September.

"We recognise the inconvenience this placed on many of our customers and are very grateful for their patience and understanding."

People in Blackpool, Chorley, Fylde, Preston, South Ribble and Wyre were all affected.

Analysts have said the group could also face regulatory performance penalties in addition to the costs announced on Wednesday.

United Utilities said its underlying operating profits for the six months to September were in line with expectations, although they were set to be lower than a year earlier as a result of new regulated price controls.

The company provides water and sewerage services for about seven million people in north west England.