Thames Water chief defends bonuses after firm posts £190m loss
Thames Water’s chief executive has been forced to defend senior executives receiving £770,000 worth of bonuses after the beleaguered water company swung to a loss of £190m and a 40 per cent rise in pollution incidents in its first-half results.
Chris Weston said the company had to offer staff “competitive packages” if it was to retain staff of a sufficient calibre to help turn the firm around, despite the industry regulator having recently condemned customers being charged for what it has called “undeserved bonuses”.
“We need to attract talent to this company,” Weston said. “If we don’t offer competitive packages, people will not come and work at Thames.”
Weston’s comments came as the firm reported another bleak set of financial results which laid bare the distress under which Thames continues to operate as it scrambles to secure lifeline funding to stave off nationalisation.
Its losses ballooned to £189m in the first half of its financial year, thanks to fines it has incurred from the regulator Ofwat and spiralling credit losses led it to report exceptional items of over £427m in the six months to 30 September.
The reporting period also saw its widely reported debts pile up to nearly £16bn, as it rushes to try and secure approval for a £6.5bn package consisting of new investment, loans and debt maturity deferrals.
Having warned earlier this year that it only had enough liquidity to last to April 2025, it struck a deal with creditors in November for the package, but it still needs to go before the High Court, which is set to make a judgement next week.
Thames is also on the hunt for new equity investors as part of the undertakings given to it by Ofwat in August after the firm’s credit rating slumped, falling foul of the regulator’s standards.
Weston said on Tuesday that the firm had received “considerable interest” from equity investors, but warned its funds may be exhausted if the court fails to approve the lifeline; a scenario that would likely lead to its nationalisation, if only temporarily.
Over the period, Thames posted a 40 per cent increase in pollution incidents, which Weston, who has only been in the post for a few months having previously worked at British Gas and Aggreko, attributed to “record rainfall and groundwater levels” in Thames’ catchment area.
It disclosed 359 category one to three pollution incidents in the six months since its last report.