Thames Water says turnaround will 'take time'

6 months ago 240

A worker from Thames Water delivering a temporary water supply from a tanker to the village of Northend in Oxfordshire on 10 August 2022Image source, PA Media

Thames Water has said that reviving the business will "take time" as it struggles to improve services while coping with billions of debts.

The comments came as Thames said profits for the first half of its financial year had halved to £246m.

Worries persist about how the UK's largest water company will deal with its debts, which rose 7% to £14.7bn.

Concern over its financial strength earlier this year led to speculation it might be taken over by the government.

Thames Water's two interim chief executives have said that will not be necessary as it has more than £3bn in cash and recently got a £500m cash injection from its shareholders.

However, the source of that money was a further loan and the chairman of the Environment Select Committee, Sir Robert Goodwill, has questioned whether Thames has represented its finances accurately.

In response, the company wrote to Sir Robert saying that the £500m "does not increase the debt burden" on Thames Water.

Investors have also said they will pump in an additional £750m but that is contingent on the regulator agreeing to bill increases of 40% by 2030.

Thames Water's co-chief executives, Cathryn Ross and Alastair Cochran, said: "It is clear that immediate and radical action is required."

They added: "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.

"We will continue to make the tough choices required to deliver what matters most to our customers and the environment."

Last week, the auditors of Thames' parent company - Kemble Water Holdings - warned there was a "material concern" over its future.

This was partly due to uncertainty over how a £190m loan, which is due for repayment in April 2024, will be refinanced.

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