Thames profits leak out
London's water provider Thames Water reported a strong drop in profits after six months blighted by criticism over leaks and high infrastructure spending to fix London's ancient pipe network.
The water company officially dubbed Britain’s leakiest reported first-half profits almost a quarter down on last year’s, down from £29m to £93.3, while spending went up from £50m to over £270m in the same period.
Repeatedly attacked over its leak record, Thames Water invested heavily in replacing pipes but also spent a substantial £8m on encouraging water efficiency among its customers.
The cost of mailing campaigns and advertising also contributed to the fall in profits, Thames Water said.
Jeremy Pelczer, Thames Water’s managing director, said: “This has been a challenging time for the business. While Thames Water is not alone in suffering the effects of rising energy costs, the company has also had to bear the costs of dealing with the sustained drought, caused by 19 months of below average rainfall.
“Operational costs have been high during this period, although a comprehensive restructuring process is in train which will reduce these going forward into the next period improving our efficiency.
“RWE announced its intention to sell Thames Water to Kemble Water Limited on 16 October 2006.
“With the change of ownership to be completed soon, we now have the necessary stability to give further impetus to our plans to meet our regulatory targets and to take forward our £3.1billion programme of investment, including our plans to replace hundreds of miles of Victorian mains in London to tackle leakage, through to the end of the current regulatory period in 2010.”