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Thames Water has reported a return to profitability for the full year following a 40% increase in customer bills last year. The company announced a post-tax profit of £113 million for the year ending in March, a significant turnaround from the £1.51 billion post-tax loss recorded in the previous year.
Despite this improvement, Thames Water’s net debt grew from £16.8 billion to £18.5 billion, reflecting ongoing borrowing to support operations. The company noted that it has been financing its activities through a combination of debt and internally generated cash flow. Chief Executive Chris Weston commented on the business’s progress, stating, “The progress we have made in turning the company around has meant we are now performing better.”
These results were disclosed shortly after the government declined a proposed bailout deal for Thames Water in June. The plan involved Thames Water’s lenders seeking relief from future pollution fines in exchange for writing off £9.4 billion of the company’s debt and injecting new capital. Meanwhile, Thames Water reported an 18% decrease in pollution incidents but met just over half of its performance targets. However, customer complaints increased sharply by 77%, with issues related to bills constituting over 75% of these complaints.
The company highlighted that revenues from customer bills alone are insufficient to cover the extensive upgrades required to address its aging infrastructure, leading to a continued need to raise additional funds through borrowing. Thames Water also stated that it has secured enough debt financing to sustain operations until the fourth quarter of 2026. Weston mentioned in an investor call that funding decisions await clarity on the stance of the incoming Burnham government. Labour MP Andy Burnham, who is anticipated to become Prime Minister soon, has previously advocated for the nationalization of Thames Water
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