Thames Water payout up as profits improve

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The Independent Online
Thames Water kicked off the reporting season for the privatised water industry in an upbeat mood yesterday with a 15 per cent rise in headline profits and a 22 per cent jump in its dividend payout to shareholders, writes Chris Godsmark.

The news was greeted enthusiastically by the markets, with several teams of City analysts revising their profit forecasts upwards. The shares climbed 7.5p to 552.5p.

As Ian Byatt, the water regulator, castigated the industry for failing to meet investment targets and doubling dividends, Thames management pledged to invest a further pounds 150 over the next five years on water and sewage improvements.

"That's the customers' share of the improvements we've made," said David Luffrum, the finance director. Profits excluding exceptional items in the six months to the end of September rose from pounds 163.9m to pounds 188.2m. Earnings were boosted by a reduction in losses from Thames' troubled diversification.

Investment column, page 21