A consumer group called on Thames Water to share its success with customers after it reported a 34% rise in annual profits to £590.1m (€742m) today.
The water company said significant efficiency improvements delivered the turnaround, which followed an 8.4% decline in profits the previous year. With investment now running at £1bn (€1.25bn) a year, Thames said it had met its regulatory target on leakages for the second year in a row.
The performance for the year to March 31 was a far cry from two years ago, when the group was forced to apply for a drought order after several months of below-average rainfall in its region, which covers London and the South East.
Chief executive David Owens said: “Our emphasis on getting the basics right has really paid off, but we had a lot of ground to make up, and we are not about to rest on our laurels.
“We have a massive programme of investment ahead, and know we must do more to improve the service we provide to all our customers.”
The company, which provides drinking water to 8.5 million customers, was acquired by a consortium of investors led by Australia’s Macquarie in December 2006.
The Consumer Council for Water acknowledged that profits were vital for financing infrastructure improvements, but said the scale of today’s profits haul meant customers were also bound to expect a share in the success.
Thames Water increased its prices by around 5.9% in April, as previously allowed by regulator Ofwat. At under £300, the company said its average bills were still the lowest in the country.
Thames Water announced today it had set up a £10m (€12.6m) fund, financed from its profits, to help disadvantaged customers and assist with educational and environmental projects in the region. The company currently spends £2m (€2.5m) a year on community projects.
David Bland, CCW chairman for London and the South East, said: “We are eagerly awaiting the details of how the company plans to deliver the added value to its customers and not just shareholders.”
He said the next five-year price review, which will be decided in 2009, should see Ofwat set prices and service improvement to reflect what “consumers want and will find acceptable”.