Thames Water losses hit £1.7bn as debt pile grows and utility’s future remains at risk
- Britain’s biggest water utility’s debts hit £16.8bn as it fights for survival
- Pollution incidents on the rise: Thames blames increased rainfall
Thames Water slumped to a £1.65billion pre-tax loss last year as its enormous debt pile continued to grow and its environmental record deteriorated.
Britain’s biggest water utility, which is set to impose a hosepipe ban on four English counties later this month, remains at threat of both nationalisation and collapse as its investors and creditors scramble to keep the group afloat.
It comes as the entire water sector hits households across the country with price hikes intended to fund billions of pounds worth of critical infrastructure, which critics accuse firms of neglecting in favour of egregious shareholder payouts.
Thames Water said on Tuesday an underlying loss pre-tax loss of £6million for the 12 months to 31 March was compounded by a £1.3billion provision against a loan from its parent company not deemed recoverable.
It also racked up £122million in fines, £198million in restructuring plan fees and £151million of restructuring costs.
This helped drive Thames Water’s net debts to around £16.8billion, up from just over £15.2billion last year.
Thames Water said it had made ‘progress on addressing underlying causes’ of pollution
Thames Water is still trying to win approval for a rescue plan funded by its senior creditors, which warned last month the group has a ‘very short and closing window’ to ensure its survival as a private business.
Boss Chris Weston said on Tuesday: ‘We recognise that our current gearing is too high and, to address this, we are progressing with our senior creditors’ plan to recapitalise the business which will see us return to a more stable financial foundation.
‘This will come with a requirement to re-set the regulatory landscape and acknowledge it will take at least a decade to turn Thames around.’
Thames Water also recorded a 34.3 per cent year-on-year increase in pollution incidents, which it blamed on ‘significant rainfall and high groundwater levels’.
The firm said it had made ‘progress on addressing underlying causes’ of pollution incident, highlighting efforts to be ‘more proactive in sewer cleaning’.
Weston added: ‘While it is disappointing this work was not reflected in performance improvement in the year, we are confident that it will translate into future environmental performance.
‘We invested a record £8.5billion in infrastructure between 2020 and 2025.
‘We enter the new regulatory period of 2025-2030 in a better place than we entered the 2020-25 period with leakage at its lowest ever level, down by 13.2 per cent since 2020.’
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.