UK’s biggest water firm warns it will run out of cash in less than a year and needs to raise £3.25billion to survive
THE UK’s biggest water firm has warned it only has enough cash to keep going until May 2025.
The boss of Thames Water confirmed things are so critical he has already met with the new Labour Government.
The firm, which has 16million customers and 4,700 staff, needs to raise around £3.25billion from investors to survive.
Its existing shareholders have refused to pump in more cash following a stand-off with regulator Ofwat.
The cash crunch comes as the Government is trying to raise money from global investors for big British infrastructure projects.
Thames is awaiting an initial verdict from Ofwat tomorrow on its plans to hike customer bills by 56 per cent over the next five years.
In return, it will spend £22billion on fixing leaky pipes and sewage spills.
CEO Chris Weston said tomorrow was “another step in the process and not the end point”.
But if Ofwat rejects the plans, it will signal that Thames Water cannot rely on having a bigger income from higher bills.
This will make it harder to raise cash from investors who want to make money from steady returns.
Thames’ own figures show its customers are already struggling to afford its bills as it has the highest bad debts of any utility.
They are unlikely to be able to afford bills of an average £6,733 by 2030 — £262 extra a year.
The company is deemed “too big to fail” and if it runs out of cash it will need to be supported by the taxpayer in some way.
Business Secretary Jonathan Reynolds has previously said he didn’t want there to be a nationalisation and said there should be a “solution that falls short of that”.
However, PM Sir Keir Starmer has suggested there should be “special measures” for failing water companies.
Mr Weston said: “Special administration is something that is not in the interests of any of our stakeholders or the UK taxpayers.
“I can’t put any probability on whether it will or won’t happen, but we are focused on making sure it does not.”
Mulberry boss out
LUXURY handbags brand Mulberry has sent its boss packing amid a sales slowdown which has shown no signs of stopping.
Thierry Andretta has departed just two months after the company warned it did not expect trading to improve.
He has been replaced by Andrea Baldo, from Danish fashion brand Ganni.
Mr Baldo, who also worked at Marni and Diesel, said he was “thrilled to join Mulberry at such a pivotal moment”.
Mulberry is worth just £63million after crashing in value from 900p-a-share when Mr Andretta took his job in 2015 to 100p.
The Somerset-based brand has been hit hard by the downfall of Debenhams and closures at House of Fraser which were major stockists, as well as China’s post-pandemic slowdown.
Jobs hit go-slow
RECRUITER PAGE GROUP has warned its profits will halve this year due to a weakening jobs market.
Hirings plunged by 18 per cent last month and the company expects to make annual operating profits of £60million, about half the £118.3million reported last year.
Boss Nicholas Kirk said companies were reluctant to take on more permanent workers and staff were uneasy about moving jobs.
Co-op to get fill in tie-up
THE CO-OP has struck a deal to open convenience stores at EG petrol stations, two years after selling its own forecourts to ASDA.
The tie-up puts the Co-op at the centre of a split between the billionaire Issa brothers’ business interests.
Asda is currently run by Mohsin Issa, who owns a 22 per cent stake, after a £6.8billion takeover.
His brother, Zuber Issa, sold his stake in Asda last month and used the money to buy around 30 UK petrol forecourts back from EG Group.
The brothers’ fortune was built on their EG petrol station business.
The Co-op deal will now mean Zuber’s “EG On The Move” business will go head-to-head with Mohsin’s Asda Express stores on forecourts.
The Co-op said it will start with seven franchise stores with EG as part of its plans to have 160 by 2030.
Jumping beans
COFFEE lovers could face paying up to 25 per cent more for their regular fix, the boss of LAVAZZA has warned.
Giuseppe Lavazza blamed poor harvests in Brazil and Vietnam plus supply chain disruptions for soaring prices.
He said the price of coffee beans could rise by 20 to 25 per cent in the coming year.
Lavazza said: “I don’t see any reason why coffee prices will go down.”
Despite price rises, the coffee products firm said it had sold the equivalent of 32million more cups of coffee than two years ago.
£211m Shein on
FAST-FASHION firm Shein aims to soothe criticism of its potential £50billion London listing — by pledging to invest £211million in the UK and Europe over five years.
Chairman Donald Tang yesterday revealed plans for a £169million fund to support start-ups working on textile recycling technology. Shein — which made £1.5billion profit last year — earmarked £42million of it for designers and research aid.
It follows criticism of the firm’s supply chain in China and claims of forced labour.
Shares
BARCLAYS
down 5.30 to 216.75
BP
down 20.40 to 454.25
CENTRICA
down 2.90 to 136.20
HSBC
down 3.40 to 669.50
LLOYDS
down 1.18 to 57.84
MARKS & SPENCER
down 6.80 to 290.30
ROYAL MAIL
up 3.20 to 331.00
SAINSBURY’S
down 4.60 to 254.40
SHELL
down 1.00 to 2,834.09
TESCO
down 1.00 to 308.40
VISTRY GROUP says it will build 18,000 homes this year — 11 per cent more than in 2023 — after profits rose.
Formerly Bovis Homes, it hailed Labour’s return of house building targets and expects pre-tax profits to increase by 7 per cent to £186million.