Thames Water returns to profit as debt burden swells to £18.5 billion

Thames Water swung back to a £113 million post-tax profit for the year to 31 March 2026, but the turnaround came with net debt of £18.5 billion, up from £16.8 billion. The company also reported a pre-tax profit of £226.4 million, reversing a £1.51 billion post-tax loss in the prior year, yet its borrowing burden kept rising as it served about 16 million customers across London and the South East.

Higher bills helped drive the improvement. Customer charges rose by 40% last year, giving the country’s largest water company room to move back into profit even as it continued to fund itself through debt and internally generated cash flow. Chief executive Chris Weston said the company was “performing better” and described the turnaround as significant.

The headline profit did not remove the strain on the balance sheet. One account of the same results put Thames Water’s debt at £19.77 billion, underscoring how heavily leveraged the business remains. The company said it had enough funding through the last quarter of 2026, while another reading of its cash position put it at about £515 million, enough to last until the end of 2026.

The results landed as Ofwat opened a formal investigation on 9 July 2026 into Thames Water and its parent company over financial resilience concerns. The UK government has separately raised concerns about the proposed creditor-led rescue deal, keeping nationalisation in view as the company works with creditors, regulators and ministers on a recapitalisation plan.

The latest figures follow a £414 million profit in the six months to September 2025, when customer complaints jumped 75% to 55,158. They also come after Thames Water reported a £1.65 billion annual loss for the year to 31 March 2025, a reminder that the company’s return to profit has not yet resolved the wider crisis over debt, service quality and long-term viability.