Thames Water swings to profit but debt swells to GBP20 billion

Troubled Thames Water has revealed it swung to an annual profit but saw its debt mountain balloon close to £20 billion.

The UK's biggest water supplier, which has around 16 million customers across London and the South East, reported pretax profit 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.

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.

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."

By Holly Williams, Press Association Business Editor

source: PA

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