Thames Water Utilities Limited reported stronger first-half earnings on Wednesday, citing higher revenue and tighter cost control, even as the company continued to seek a long-term recapitalisation solution to stabilise its balance sheet.
Britain’s largest water supplier said underlying revenue for the six months to Sept. 30 rose 42% to £1.9 billion, driven mainly by a regulatory uplift in water and wastewater tariffs. Underlying EBITDA increased 69% to £1.2 billion, reflecting both the revenue gains and operational cost management. The group posted a £328 million profit after tax, compared with a £190 million loss a year earlier.
CEO Chris Weston said the period was marked by “good progress across all areas of our operational transformation,” noting a 20% drop in pollutions and stable leakage levels despite the UK’s hottest recorded summer. The company increased capital investment by 22% to £1.3 billion as part of what it calls its largest infrastructure upgrade in more than 150 years.
However, Thames Water said its balance sheet “remains weak,” keeping the focus on securing new investment. The company has drawn £1.43 billion of its £1.5 billion super-senior liquidity facility, with £872 million on-lent to the operating company. Creditors have continued to provide funding while talks with government and regulators continue.
On 2 October, London & Valley Water, a consortium representing major creditors, submitted a formal recapitalisation plan to the company and regulator Ofwat, which it says would deliver a turnaround “without recourse to taxpayers.” Discussions between the parties are ongoing to align the business plan, capital structure and regulatory framework needed to support the company’s long-term transformation.
Operationally, Thames Water said it had accelerated capital work focused on leakage, pollution reduction and water quality
Operationally, Thames Water said it had accelerated capital work focused on leakage, pollution reduction and water quality. The firm recorded a significant rise in complaints following the tariff increase, though water and wastewater complaints fell 11%. The company expanded the number of households on social tariffs to more than 515,000 and piloted automatic enrolment for customers in financial difficulty.
The London Tideway Tunnel network diverted nearly 3 million cubic metres of sewage from the River Thames in the first half, taking the total to more than 12 million cubic metres since it launched.
Thames Water acknowledged weaknesses in regulatory performance metrics, including a one-star rating in the Environment Agency’s 2024 Environmental Performance Assessment. The company said progress on longer-term improvement would require regulatory reform, supporting recommendations from the Independent Water Commission.
Liquidity fell 44% to £0.9 billion, largely due to higher capital expenditure, while senior gearing increased to 85.9%. Statutory net debt climbed 5% to £17.6 billion.
Weston said the ongoing recapitalisation process was vital for delivering a decade-long transformation programme. “This will restore the infrastructure and operations of the company,” he said.
