Thames Water, the UK's largest water and sewerage company, has  announced its latest financial results for the year ending 31 March 2010.

Pre-tax profit of £453.6 million was up by 4.3% on 2009/10. At £1.624 billion, turnover (up 4.2% on the preceding period) was lower than forecast by economic regulator Ofwat, following lower than predicted growth, the economic downturn, changes in customer water usage behaviour, and an increase in customers switching to a water meter. Operating expenditure of £609.2 million was down 0.9% on the preceding year which the company said reflected “continued focus on strong financial management and maximising efficiency.”

The company has reported its strongest ever regulatory performance, hitting its annual leakage target for the fourth consecutive year. Since 2005 Thames Water has cut its leakage by 27 per cent. Thames Water said that by focusing on performance and customer service since coming under new ownership four years ago, the company had consistently met its regulatory targets while delivering best-ever levels of service year on year.

The recent opening of Thames’ new Operations Management Centre which brings the company’s water and sewerage operational control teams together for the first time is expected to deliver further improvements and efficiencies.Significant new infrastructure was also commssioned during the year, including the Thames Gateway Water Treatment plant and two extensions to the London Ring Main.

Martin Baggs, Chief Executive of Thames Water, said:

"We've delivered the largest investment programme in the industry over the last five-year regulatory period, and kept customer bills among the lowest. Our task now is to maintain the levels of service our customers have come to expect, building on the strong platform that we have created. We now enter the next five year period with a new record level of investment planned."

“Cutting edge” AMP5 strategy in place

Thames Water said it was already well advanced in the planning of its AMP5 programme with a “cutting edge” capital delivery strategy firmly in place to ensure that the Company delivers all regulatory outputs at minimum cost. The company believes that with a clear focus, tight contracts and streamlined delivery process Thames  is entering AMP 5 with the capability to become the benchmark capital delivery company.

During AMP 5 the majority of Thames’ capital schemes will be procured and delivered as programmes of projects, rather than by letting an individual contract for each project. In 2010, the Company spent in excess of £1.1bn on construction, goods and services with a range of suppliers and contractors (2009: in excess of £1.2bn). Approximately 23 key suppliers (2009: 24) were engaged with a spend greater than £10m each.

Information Services are core business function

Information Services was highlighted as a core support function within the company, underpinning all of the business processes and resulting operational performance. Throughout AMP 5 the company plan to embed SAP software into all parts of the business.

Thames said that the implementation of SAP would enable the company to deploy best practice, end-to-end business processes across its operations and provide further operating efficiencies. In September 2009 the finance and supply chain work package of SAP went live - described as a very successful implementation. The Human Resources work package went live on 12 April 2010 and the early signs are described as very promising.

Thames is currently in the process of replacing and enhancing its Supervisory Control and Data Acquisition (SCADA) legacy systems which are used to monitor and control remotely asset performance on networks and process plants for water networks and treatment works.

Work is also starting on a project called Work Asset Management and Information (WAMI), described by Thames as a “far-reaching two year project that will transform the asset management and operational planning process of the Company".

Thames is currently awaiting a forthcoming public enquiry called for in August 2009 by Defra into its 25 year Water Resources Plan which it described as “of critical importance to the company and its customers.”