Debt-laden Thames Water has reported an increase in annual profits just days ahead of a key ruling on future water bill increases.
The UK’s largest water company said pre-tax profits had jumped to £157.3m for the year to the end of March.
However, Thames Water, which has faced fierce criticism over the number of sewage discharges and leaks, is saddled with debts of £15.2bn.
Later this week, the water regulator Ofwat is due to publish its draft ruling on how much water companies can charge their customers for the next five years.
There has been speculation Thames Water might have to be taken over by the government if it runs out of money.
The company says it has funding of £1.8bn, which is enough to fund its operations until May 2025.
Thames Water wants Ofwat to let it raise consumer bills by up to 44% between 2025 and 2030, with extra money promised for investment in environmental measures.
A previous plan put forward by the company was rejected by the regulator, which led to questions over the firm’s future.
When Ofwat dismissed the first plan, shareholders at Thames’ parent firm, Kemble Water, withdrew a proposed cash injection into the water company.
In March this year, Thames Water boss Chris Weston said it was “eventually possible” that the company could be nationalised, although he said that was “quite a long way off”.
If Thames does come under government control, there is speculation it would be put into a Special Administration Regime, which would see financial consultants run the company on the government’s behalf.
A precedent for this was set in 2021 when energy company Bulb went bust and was placed under special administration.
Regardless of what happens to Thames, water suppliers to its customers will continue as normal.