THAMES Water’s pre-tax profits surged 56 per cent to £259.3m last year, with the utility company declaring itself “in a strong position”, despite its customer service remaining below the industry average.
The Macquarie-backed company paid no corporation tax last year, as the government allowed it to delay payment due to its annual £1bn investment in infrastructure.
The firm also received a reduction in future tax liability of £87m, relating to a reduction in corporate tax rates from 23 per cent to 20 per cent next year.
“This is good news for customers as if our future tax liability is reduced then customer bills will be lower,” it said.
Total revenue rose to £1.91bn from £1.76bn the previous year.
Thames Water said its customer satisfaction rating “continued to lag behind the reported performance of other water companies” and that it was making improvements.
“The weather brought us substantial challenges, but despite demand for water reaching a 19-year high in the summer and flooding throughout much of our region in the winter, we got the network back to full operation quickly,” said chief executive Martin Baggs.
Last November, Ofwat rejected Thames Water’s request to raise customers’ bills by eight per cent this year, which the water company argued it needed to fund the construction of the Thames Tideway Tunnel, a new super sewer.
This week the firm started hunting for institutional investors to pour money into the new company that will build and run the 25-kilometre sewer, Britain’s biggest tunnel project since the Eurotunnel.
Thames Water is expected to put in £1.4bn of the £4bn overall cost of the project.