Thames Water half-year profit leaps to nearly £400m after it raises bills by third | Thames Water

Thames Water reported a jump in half-year profits to £386m after bills rose by almost a third; However, he warned that it faces major financing uncertainties that could lead to a rapid collapse of government control.

Britain’s biggest water company said on Wednesday it made a profit in the six months to September after losing £230 million in the same period in 2024.

Revenues rose 40% to nearly £2bn after the company was allowed to increase customer bills by 31% in April.

But despite the increase in reported profits, the company warned that there was “material uncertainty that may cast serious doubt” on the company’s status as a going concern.

The collapse of government control under a special management regime (SAR), a form of temporary expropriation, “could happen in the very near term” if the controlling lenders cannot agree on the terms of a formal takeover.

Thames Water has been on the brink of collapse for more than a year, weighed down by £17bn of net debt accumulated over the decades since privatisation.

The supplier, which serves 16 million customers in south-east England, is facing poor environmental performance as sewer leaks spark public and political anger and incur huge costs in the form of fines.

The company lost £1.6bn before tax in the year to March due to a £1.3bn loan loss.

The company was on the verge of being placed under temporary government control earlier this year, after it had to seek court approval for a £3bn emergency financing plan that also reduced the value of some of its debts to zero. It has since been working on a second deal to restructure the remainder of its debts and transfer formal ownership to lenders.

These bondholders are managed by a group of hedge funds, including struggling US firms Elliott Investment Management and Silver Point Capital, as well as more traditional investors such as Abrdn and Insight Investment. In the proposals submitted to the government, bondholders requested tolerance from the government for 15 years to compensate for environmental penalties.

But talks dragged on for months and Thames survived by gradually spending its £3bn emergency fund.

The government has so far proven opposed to any regulatory leniency, meaning investors won’t commit. Yet ministers are also desperate to avoid taking control under the SAR.