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Thames Water has estimated that it will take at least a decade to turn around the heavily indebted utility and reported a full-year pre-tax loss of £1.65bn.
Thames, which has been battling to secure new investment to avert nationalisation, said in a statement on Tuesday that its “current gearing is too high” but that it is making progress on efforts to recapitalise the business.
“This will come with a requirement to reset the regulatory landscape and acknowledge it will take at least a decade to turn Thames around,” chief executive Chris Weston said.
The UK’s largest water utility — which provides water and sewage services to about a quarter of the UK population — is struggling under a near-£20bn debt mountain and has agreed a backup £5bn rescue plan with its creditors.
The senior creditor group, which owns about £16bn of Thames Water’s ‘class A’ bonds, has been left as the preferred bidder after US private equity firm KKR walked away from a rescue plan last month.
In its annual results published on Tuesday, Thames said it had swung to a loss of £1.65bn in the year to March 31, from a £1.6mn profit in the previous year. The shift was “driven by losses on financial instruments offset by operating profit and financing costs”, Thames said.
The majority of the loss comes from a £1.2bn impairment on an intercompany loan.
The company also noted a rise in the number of pollution incidents. These increased 34.3 per cent on last year and were caused by significant rainfall, the company said. But it added that it had made progress on the “underlying causes of our poor performance”.
Weston said: “While it is disappointing this work was not reflected in performance improvement in the year, we are confident that it will translate into future environmental performance.”
