Thames Water profit as debt nears £20bn, cash to run out

Thames Water, the UK's largest water supplier serving 16 million customers, has returned to an annual profit but faces a deepening financial crisis with its debt nearing £20 billion and liquidity expected to run out by the end of the year. The company reported pretax profits of £226.4 million for the year ending March 31, a significant reversal from a £1.65 billion loss the previous year. However, its net debt ballooned to between £18.5 billion and £19.77 billion, up from approximately £16.8 billion the year before, as the firm continued to draw on borrowing to fund capital investment.

Chief Executive Chris Weston stated that Thames Water today is a very different business from what it was two years ago and is in a strong position to accelerate infrastructure upgrades. He acknowledged that while operational performance is improving, the company is working with creditors, regulators, and the government to complete a critical recapitalization. The firm's latest financial report shows it has £515 million in cash plus access to £750 million in backup funding, which it expects will last only until the fourth quarter of 2026.

The company's precarious position is underscored by its...