Thames Water – profit, debt and bills all rise

The UK’s biggest water supplier, which has around 16 million customers across London and the South East, reported pre-tax profits of £226.4 million for the year to March 31 in a marked improvement from mammoth losses of £1.65 billion the previous year.

But full-year results showed the supplier’s debts swelled to £19.77 billion, up from £17.73 billion the previous year as the group said it continued to draw down to fund capital investment.

It comes as the stricken utility, which last year put up bills by up to 40 per cent, could run out of cash within months unless a funding deal is struck.

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Creditors are battling to secure a rescue deal for Thames Water after Environment Secretary Emma Reynolds last month warned she did not believe the plan for the stricken utility goes far enough to protect customers or the environment.

It came as a last-minute blow for their hopes of a deal to stave off temporary renationalisation, with industry regulator Ofwat said to have been close to accepting the offer from bidding consortium London & Valley Water, which has proposed injecting £10 billion into debt-laden Thames Water in return for any new fines over sewage leaks being waived for four years.

Chris Weston (Image: House of Commons/UK Parliament/PA Wire)

Thames Water said last month it had enough funding until September.

Chief executive Chris Weston said: “Thames Water today is a very different business from what it was two years ago.

“While we have a lot more to achieve, the progress we have made in turning the company around has meant we are now performing better and are in a strong position to accelerate the delivery of the biggest upgrade of our infrastructure in 150 years.”

He added: “While operationally the business is improving, we are also working with our creditors, regulators and Government to complete our recapitalisation.”

Mr Weston has also called for urgent clarity from prime minister-in-waiting Andy Burnham over his plans for the sector.

He told the Press Association Thames Water has enough funding until October and is relying on creditors for support as they battle to secure a rescue takeover to stave off temporary nationalisation of the debt-laden supplier.

He said while the situation is “not terminal”, he stressed the utility’s funding situation is “not sustainable”.

Thames Water said: “Bills alone cannot fund the required investment: Thames Water still needs debt funding, creditor support, and ultimately a recapitalisation.”