Thames Water: Mixed FY 25/26 Results, But All Eyes on Andy

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Thames Water: Mixed FY 25/26 Results, But All Eyes on Andy

William W Wade AC Europe Credit Research

(44-20) 7134 0684 17 July 2026 J P M O R G A N

william.walter.wade@jpmorgan.com

Financial and Operational Performance

Figure 2: EBITDA and FCF Financial performance: Thames Water's financial performance in FY 25/26 featured

2,750 £m many of the same trends we’ve seen in recent reporting periods – solid revenue and

profitability growth, but with continually rising capex leading to negative FCF and net

2,250 2,096

debt growth. On an underlying basis, revenue was up +39% y/y (£3.62bn), EBITDA

1,750 rose +56% (£2.09bn) and net profit improved to £204m from £13m y/y. Top-line growth

1,317

1,202 almost entirely reflected planned increases in customer bills as per the allowances in 1,250 934

AMP8. Profitability was further supported by tight cost control (opex only up +11% y/

y), despite higher overall activity levels. Large employee expense increases were

250 mitigated by modest rises in energy costs and decreases in insurance premiums and

-250 requisitions. Operating cash flow rose +48% y/y (£1.91bn) driven by higher underlying

profitability, partly offset by greater working capital absorption and pension payments. -750 -446

-757 Company reported free cash flow remained negative, but improved to -£635m vs. -

-942 -976-1,250 £749m y/y, reflecting a larger jump in operating cash flow vs. growth in capex.

FY22/23 FY23/24 FY24/25 FY25/26

Management EBITDA FCF (JPMe)

Operational performance: Thames Water's operational performance was once again a

Source: Company reports, J.P.Morgan, as of Mar-26. mixed bag, with CEO Chris Weston describing operational metrics as “in the middle of

the pack” when compared to peers. Performance was encouraging in leakage reduction