Thames Water debt hits £15.8bn but boss hails turnaround progress

Thames Water today revealed its debt pile had swelled to £15.8 billion after publishing half-year results showing an improved underlying financial performance.

It warned that an “investable” final determination on its next five-year operating period by regulator Ofwat on 19 December will be “fundamental“ to its future.

The half-year report showed a 4% fall in leakage levels to a record low but with pollution incidents up 40% due to record levels of rainfall.

Revenues rose 10% to £1.3 billion, reflecting an inflation linked increase in bills for water and wastewater services. Underlying earnings of £715 million lifted 14%.

The utility, which recently revealed a £3 billion emergency financing plan to keep it solvent until October 2025, reported net debt of £15.8 billion.That compared with £14.7 billion the year before.

New chief executive Chris Weston, said: “In the last six months we’ve made solid progress on the transformation and turnaround of Thames Water.”

He said levels of investment had remained at high levels in the first half of the year.

Weston added: “At the same time, we’ve reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process.

“The next critical step is receiving an investable Final Determination which is fundamental to our future.”

Thames Water is the UK’s largest water and wastewater services provider with 16 million customers across London and the surrounding counties.

Infrastructure investment firm Covalis Capital recently said it had made an offer to buy the business, a move which could see the utility broken up into smaller businesses.