Thames Water has reported a £200m profit in the year to 31 March, after reporting a loss of £1.6bn in the previous year, but only has funds to last until the end of 2026.

The troubled utilities firm stated that its revenue increased by 40.7% to £3.8bn, while its underlying earnings rose by 61.5% to £2.1bn.

Thames Water said that it began its biggest upgrade ever in 2025, with a "record-breaking" £20bn five-year programme, which aims to upgrade water and waste services.

However, the firm has seen its net debt increase from £16.8bn in the last financial year to £18.5bn, with billing complaints rising by 101% in the same period.

CEO at Thames Water, Chris Weston, told Sky News that with Andy Burnham coming in as Prime Minister, its bail out deal with the Government could collapse.

It comes after the firm’s £10bn rescue deal was described as “weak” by the Government last month, pushing it close to being placed in temporary public ownership.

Weston stated: "The situation is very fluid, there is a lot of uncertainty, which has been added to by the change of Prime Minister, understandably as it's very important to understand what the new PM plans will be for Thames Water.

"We have not had any direct discussions [with Burnham], understandably as I'm sure he has a long list of issues to consider, but it does heighten the risk. Our creditors continue to be supportive, but it does heighten the risk.

"It is right that the company's cash will run out in Q4 but we did get a letter of support from the creditors which shows they will extend support well into next year".

Head of markets at AJ Bell, Dan Coatsworth, noted that while some financial figures were moving in the right direction, there is a lot more to unpack from the utilities firm’s financial report.

He concluded: "At this point you would need a lot more than H2O to clean up the mess at Thames Water. Borrowings have swelled, customer complaints are surging, fines for missed targets are piling up, and the rescue deal on the table from lenders is hanging in the balance.

"While the company announced a return to profit for the year ended in March it is cash that really matters, and a long-term resolution is needed to secure its future.

"The potential for the expected next Prime Minister Andy Burnham to consider nationalisation as an option looms over Thames Water, and the coming weeks could be crucial ones for the destiny of the business."

---