Land sale helps profits jump for Thames Water
Thames Water, the UK's biggest water company, said its annual profits j umped by 40% after it raised bills and sold off surplus land.
The utility firm, which serves 15 million customers in and around London, said average household water bills rose by £7, or 2%, to £374 in the year to the end of March. Although it added its combined water and waste water bills remain the third lowest in the UK.
It said extra revenue was raised during the year from £32.1 million of property and equipment sales that will see a new school built on its former Lea Bridge depot near Leyton, and a £66 million benefit from its handling of its financial instruments.
It also booked £49.3 million of other revenue increases in the period.
This helped see the group's full-year pre-tax profit jump to £511.2 million from £364.7 million.
However, the group added that during the year, it failed to meet set targets for customers who went without water for more than 12 hours, and incurred a £4.7 million penalty that will be filtered through to cut customer bills.
It was also on the end of another £11.7 million penalty agreed with regulator Ofwat for sewer flooding, that will also be passed on to cut customer bills.
The group is in the middle of funding the £4.2 billion "super-sewer'" Thames Tideway Tunnel, a 15-mile sewer running from west to east London expected to be completed by 2023.
It said it has so far spent £1 billion to buy land and prepare for the project, and first major part of the project, the Lee Tunnel was commissioned in January.
Ofwat handed a licence to Bazalgette Tunnel last August which will build the scheme on behalf of Thames Water. The project is designed to greatly reduce the 39 million tonnes of untreated sewage that overflows into the Thames in a typical year.
The project is expected to create more than 9,000 direct and indirect jobs at the peak of construction.
Thames Water added that during the year it cut pollution incidents by 49% last year, its best performance since 2010. It also hit its leak reduction target for the 10th year in a row.
Thames Water chief executive Martin Baggs said: "We've set ourselves ambitious targets and we still have a way to go, but I am delighted with the progress we have made in the last 12 months."
In May Thames Water announced that Mr Baggs will hand over to new chief executive Steve Robertson in September.
Mr Robertson was chief executive at business mobile phone firm Truphone since 2011, and before that was boss of telephone network BT Openreach for six years.