Thames Water suffers £1.65billion loss amid 'disappointing' pollution and debt rises

Thames Water’s boss has said the company will need ‘at least a decade to turn around’ as it announced a £1.65billion loss and a rise in pollution.

The troubled utility company also announced its eye-watering debt pile had swollen to £16.8billion, in its annual results published today (July 15).

Britain’s biggest water company, Thames Water serves around 16million people with fresh and waste water. It provides waste water services in Windsor and Maidenhead, and Slough is covered for both fresh and waste water.

The company has drawn criticism over pollution in waterways and its perilous finances.

It also announced that a hosepipe ban for some of its regions, including some Berkshire postcodes in the Reading and West Berkshire area, will come into force later this month.

Commenting on the company's results, chief executive officer Chris Weston said the company had made ‘good progress’ on performance, ‘despite the ongoing financial challenges’.

Mr Weston said the rise in pollution was ‘disappointing’ and had been ‘adversely impacted’ by weather and groundwater conditions.

Pollution spills rose by a third from the previous year, up from 350 to 470 incidents, according to the company’s results statement.  

Thames Water was fined a record £123million by industry regulator Ofwat in May, for failing to prevent unnecessary sewage spills and for ‘undeserved’ multimillion-pound shareholder payouts.

Mr Weston 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.”

Thames Water’s financial woes saw the company thrown a lifeline £3billion emergency loan to stave off the threat of bankruptcy in February.

But questions remain over its long-term viability without longer-term financing.

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 re-set the regulatory landscape and acknowledge it will take at least a decade to turn Thames around."

More than £8.5billion had been invested in Thames Water’s infrastructure over the last five years, Mr Weston said, and the company was now in a ‘better place’.

Mr Weston said: "Thames Water has made good progress in operational performance, despite the ongoing challenging financial situation.

"The new organisation structure, focused on our infrastructure, brings clearer accountability and has helped our transformation continue to gain momentum.

“As a result, we have made sustained progress overall against our six critical operational priorities in 2024/25.

 “However, that progress is not demonstrated in our disappointing pollutions outturn.”

Thames Water announced a hosepipe ban will begin for Berkshire postcodes RG4, RG8 and RG9, as well as areas of Gloucestershire and Oxfordshire from July 22.

Berkshire postcodes outside of those listed will not be subject to a hosepipe ban at this stage.

Fellow Berkshire water provider South East Water has also urged customers to ‘cut down on everything but essential use’ as the region grapples with multiple heatwaves.