Thames Water Utilities Limited interim results for the period ended 30 September 2017

Last reviewed:

Doing more for customers

  • No dividends to external shareholders for 2017/18, to focus on improvements in operational performance
  • Pledge to return £40 million of performance-related penalties to customers earlier than required, to keep 2018/19 bill increases below inflation
  • £533 million invested in infrastructure – over £12 billion invested in the last 12 years
  • Independent forensic review of ‘trunk’ water mains completed last month, setting out a clear action plan to minimise significant bursts
  • Improved Ofwat customer satisfaction rating - 4.25 out of 5 (Year end 2016/17: 4.12) – retail scores beat industry average for first time
  • 95.78% of written complaints resolved first time (Year end 2016/17: 94.5%)

Being good custodians of the environment

  • Highly focused approach to get leakage target back on track by 2020 – increased investment in technology and resources dedicated to leakage reduction
  • 10% reduction in pollution incidents
  • 9% reduction in sewer blockages and 11 % reduction in sewer flooding incidents year-on-year
  • 17% increase in self-generation of electricity compared to first six months of 2016/17
  • Using 100% renewable power following an agreement with Haven Power
  • 3,000,000 consecutive working hours without a lost-time injury

New chapter brings boardroom change

  • Ian Marchant, former Chief Executive of SSE Plc, to take over as independent Chairman of Thames Water in January 2018
  • Marchant to lead extensive review of governance with intention to close Cayman Islands’ subsidiaries
  • New major long-term investors in May 2017 – two largest investors represent pension funds
  • Refreshed executive team – 60% new to their roles since September 2016

Solid and sustainable finances

 

Six months ended

 

30 September 2017

30 September 2016

Revenue (underlying*)

£1,029.9m

£1,024.3m

Capital expenditure excluding intangibles

£532.7m

£540.9m

Underlying operating profit**

£281.5m

£301.8m

Operating profit

£294.4m

£317m

Dividends to the group

£26m

£30m

Dividends to external shareholders

£0m

£0m

*Excludes revenue recognised on the arrangement with Bazalgette Tunnel Limited, the independent company appointed to construct the Thames Tideway Tunnel.

**Operating profit excludes gain on the sale of our non-household retail business to Castle Water.


Steve Robertson, Chief Executive Officer, Thames Water said: “Our fundamental purpose is to serve our customers and I am pleased that we’ve made progress in 2017 that will benefit them now and over future generations. We’re committed to keeping customer bills as low as possible, so we will be returning £40 million of performance-related penalties to customers two years earlier than we needed to, keeping the expected 2018/19 bill increases below inflation.

"We’ve been investing heavily for more than a decade and we will continue to do so – we spent another £533 million on our infrastructure in the six months to 30 September. In areas where we’re not delivering we’ve committed to spending significantly more than planned to put things right, such as an extra £97 million on our largest ‘trunk’ water mains. Actions such as these will help us to get our leakage target back on track by 2020.

"Both our new and existing shareholders fully support the refreshed management team, and are aligned with our vision. They will not be paid a dividend this financial year, while we all focus on making the right long-term investment decisions for our customers.”