Troubled Thames Water has revealed it slumped to a £1.65 billion annual loss and saw its mammoth debt mountain balloon higher.
The utility tumbled to the pre-tax loss in the year to March 31 from profits of £157 million the previous year after it booked a £1.27 billion bad debt provision on intercompany loans and set aside £122 million for fines from Ofwat, among other costs.
Results from Britain’s biggest water supplier showed its net debts swelled by another £1.65 billion to £16.79 billion by the end of March.
It also revealed a “disappointing” performance on pollution, with incidents surging by over a third (34.3%) to 470.
The figures come as the water firm – which has 16 million customers – remains locked in talks over a rescue funding deal with senior creditors after private equity firm KKR last month pulled out of plans to inject £4 billion of much-needed cash.
Chris Weston, chief executive of Thames Water, said: “Pollutions were adversely impacted by rainfall and high groundwater levels but we have made progress in terms of addressing many of the underlying causes of our poor performance, including being more proactive in sewer cleaning.
“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.”
On Monday, Thames Water became the latest supplier to announce a hosepipe ban, which will begin next Tuesday for customers in Oxfordshire, Gloucestershire, most of Wiltshire and some parts of Berkshire.
And its bosses are set for a grilling by MPs on Tuesday after being recalled by the Environment, Food and Rural Affairs (EFRA) Committee to answer questions on bonuses for senior executives and the group’s plans for a rescue deal.
It recently emerged that £2.5 million of bonuses paid to senior Thames Water executives in April under a controversial “retention” scheme cannot be recovered by regulators.
Annual results for Thames Water showed that on an underlying basis, it swung to a pre-tax loss of £6 million, from profits of £204 million the previous year, as revenues lifted by over 8%.
The debt levels highlight the extent of Thames Water’s creaking finances as it looks to secure vital funding and stave off nationalisation by the Government.
Mr Weston said: “We recognise that our current gearing is too high and, to address this, we are progressing with our senior creditors’ plan to recapitalise the business which will see us return to a more stable financial foundation.
“This will come with a requirement to reset the regulatory landscape and acknowledge it will take at least a decade to turn Thames around.”
Thames Water added that the recapitalisation process remains “ongoing” but insisted it was “in an improved position compared to six months ago, and our creditors have been supportive throughout the process”.
The firm said it had seen Ofwat performance penalties increase to £88.2 million in 2024-25 from £56.9 million the previous year as it missed regulatory targets.
Thames Water was fined a record £122.7 million in May after it was found to have broken rules over sewage treatment and paying out dividends.
