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Thames Water has embarked on a new three-year turnaround plan and acknowledged its “performance was not where it needed to be”, as the UK’s biggest water company reported a drop in first-half profits.
The utility, which provides water and sewerage services to about 15mn households in London and surrounding areas, said on Tuesday that pre-tax profits fell 54 per cent to £246mn in the six months to September 30. Revenues climbed 12 per cent to £1.2bn in the period.
“Turning around Thames will take time. We simply cannot do everything that our customers and stakeholders wish to see at a pace and for a price that everyone would like,” interim co-chief executives Cathryn Ross and Alastair Cochran said in a statement.
Over the past year, Thames Water has faced larger financing costs on its £14.7bn debt pile as well as bigger labour and energy bills. The pressures have sparked fears over the financial health of the UK’s largest privatised water utility.
The concerns were deepened after the Financial Times last week revealed that Thames Water had presented a loan from its shareholders to its parent company as fresh equity. The company has said it was accurate to describe the £500mn loan as equity.
The group said on Tuesday that it had total liquidity of £3.5bn at the end of September. Its shareholders include sovereign wealth, private equity and pension funds.
Thames Water was rocked in June after Sarah Bentley, the chief executive, abruptly quit after a boardroom row.
The group is seeking approval from Ofwat to be allowed to increase customer bills by about 40 per cent — before inflation — by 2030.