THAMES Water said its customer service is “still far below the desired level” as rising costs helped send its annual pre-tax profits falling by more than a fifth to £144.9m.
Post-tax profits dropped 31 per cent to £150m, and the firm received a £5m credit from the Treasury.
“We have not paid much corporation tax in recent years because the government’s tax system allows us to delay, not avoid, payment of tax based on how much we invest,” said Thames Water, which has 9m water customers in London and the Thames Valley.
“Because we are investing £1bn a year from 2010 to 2015, more than any water firm in the UK’s history, we are able to defer a lot of tax payments to future years.”
Revenues rose six per cent to £1.8bn but the cost of weather-related repairs and bad debts from customers ate into the bottom line.
Meanwhile customer satisfaction plummeted during the year according to surveys from the water regulator Ofwat.
The number of sewage flooding leaks increasing from 355 to 549 in the regions covered by Thames in 2012, which the firm said was partly due to unusual amounts of rain throughout the year.
Thames also missed Ofwat targets on pollution incidents, post-tax return and below-ground asset performance.
Ofwat’s new head Jonson Cox, which will set the latest industry-wide price limits for water next year, yesterday spoke out against “the dichotomy between profits and the prices charged to customers [which] raises business, regulatory and moral questions”.
The company is owned by Australian bank Macquarie and a range of pension funds, sovereign wealth funds and insurers.