Thames hits milestone in its Cayman closures and axes dividends

Thames Water announced this week, progress in its closure of controversial Cayman Islands

financial subsidiaries and the cancellation of dividends to external shareholders for 2017-18 and for the rest of the pice control period to 2019-20.

Thames said it had reached a “major milestone” in the Cayman subsidiaries closure with the formal agreement for the move from Thames' debt investors . Chief executive officer, Steve Robertson, said the company’s debt investors and corporate bondholders were “very very positive about getting rid of the Cayman arm,” along with the need to improve trust with customers and other stakeholders. “They are aware of the zeitgeist,” he said.

The cancellation of dividends would free up funds for investment in “customer outcomes,” Robertson said.

Recently appointed chairman, Ian Marchant, said “Better transparency is crucial to build trust with our stakeholders, so we have made critical changes to our governance and reporting.”

Marchant announced that the chief executive will receive no annual bonus his year or next “while we get leakage back on target with any future long term variable pay tied to meeting challenging customer commitments.”

“It is only right that senior management get paid for performance,” he said.

The announcements came as Thames published its annual report for the year to 31 March 2018. Underlying profit before tax – excluding income from the Thames Tunnel subsidiary, Bazalgette, and from its sale of its business retail arm – at £34.6 m on revenue just over 1% down at £2,018m.

Operating profit was down 4.9% to £517m after a £90m increase in operating expenses.

Thames unveiled the appointment of former Ofgem chief executive, Alistair Buchanan as an Independent Non-Executive Director.

A post-results briefing with Steve Robertson will appear in the July edition of THE WATER REPORT.