Thames Water reveals huge debts day after confirming hosepipe ban for 1.1m Brits

Thames Water has revealed it is nearly £17 billion in debt less than 24 hours after announcing a hosepipe ban that will affect 1.1 million Brits. The under-fire water firm revealed on Tuesday morning it has slumped to a £1.65 billion annual pre-tax loss from profits of £157 million the previous year.

It comes after Thames Water booked a £1.27 billion bad debt provision on intercompany loans and set aside £122 million for fines from Ofwat, among other costs. Its full-year results showed its net debts swelled by another £1.65 billion over the year, while it revealed a "disappointing" performance on pollution and sewage spills. The figures come as the water firm remains in talks over a rescue funding deal with senior creditors after private equity firm KKR last month pulled out of plans to inject much-needed cash.

In a statement, Thames Water's CEO Chris Weston said: "We recognise that our current gearing is too high and, to address this, we are progressing with our Senior Creditors' plan to recapitalise the business which will see us return to a more stable financial foundation.

"This will come with a requirement to re-set the regulatory landscape and acknowledge it will take at least a decade to turn Thames around."

He added the firm has made "good progress in operational performance, despite the ongoing challenging financial situation".

The full year results show Thames Water's debt mountain has increase to £16.8 billion.

Yesterday, the company announced a hosepipe ban will begin next Tuesday for customers in Oxfordshire, Gloucestershire, most of Wiltshire and some parts of Berkshire.

The water company said the temporary measure will be brought in after the Environment Agency placed its area into the "prolonged dry weather category".

The ban will begin on July 22 for customer in all OX postcodes, all GL postcodes, all SN postcodes as well as customers in RG4, RG8 and RG9 postcodes.

It does not affect businesses where hosepipe use is part of their purpose, such as car washes or garden centres.

Thames Water said there is less water available and a higher demand after a prolonged period of hot weather, with customers reportedly using up to 30% more when the temperature exceeds 25C.