Thames Water warning despite £435m profit

Published on Monday 22 June 2009 21:10

BRITAIN'S biggest water company yesterday posted higher full-year profits, but warned of a "challenging" year ahead as the recession piles on the pressure.

Thames Water, which provides drinking water to 8.5 million customers, has squeezed costs to grow profits 4 per cent to 435.1 million in the year to 31 March – but said it was now "in a very different climate".

The firm said: "The increased cost of borrowing, combined with rising levels of customer bad debt and a sharp decline in commercial and metered demand for water is having a direct impact on the business."

Thames's bad debts rose 16 per cent to 45.1m over the year, while its costs for power jumped by 30 per cent to 78.5m.

Lower metered demand due to last year's wet summer dented revenues by 10m.

David Owens, Thames Water's chief executive, said: "The prolonged period of instability in the financial markets means we are now operating in a very different climate to last year."