Thames Water has swung to a £113m post-tax profit after hiking customer bills by 40%, yet the UK’s largest water company is running out of cash so fast it could be insolvent by the end of the year.
The utility, which serves 16 million people in London and the South East, reported the profit for the 12 months to March — a dramatic turnaround from a £1.51bn loss the previous year. But its net debt swelled to £18.5bn from £16.8bn as it continued to borrow to fund operations. Chief executive Chris Weston said: “The progress we have made in turning the company around has meant we are now performing better.”
“Thames Water posts £113m profit but warns it may run out of cash by year-end.”
Despite the improvement, Thames warned it expects to run out of money by late 2026 — a timeline sources say may be as short as the end of this year if a rescue deal isn’t finalised. The contradiction stems from rising borrowing costs and a failed government-backed rescue plan. In June, ministers rejected a proposal under which lenders would have written off £9.4bn of debt in return for leniency on future pollution fines.
Pollution incidents fell by 18%, but the company hit only half its performance targets. Its financial report states it has enough debt funding “through to Q4 2026”, but City A.M. reports the firm is “set to run out of cash by the end of the year” as negotiations for a finalised rescue deal stall.
The results lay bare a grim arithmetic: even with a 40% bill rise, customer payments cannot cover the massive upgrades needed to fix Thames’ ageing, underinvested infrastructure. The company is now borrowing more just to stay afloat, leaving its 16 million customers and the Treasury to wonder who will pay for the fixes — and when the taps will run dry.