Thames Water will begin the search for a new chief executive early next year, with the aim of having a successor in post by the end of 2016. Baggs will stay on until the new chief executive takes over.
The company also announced its results for the first half of 2015-16 today. Profits have fallen year-on-year to £205.2 million from £214.7 million. Meanwhile, dividends paid to the parent company Kemble Water Holdings are up by £5 million to £25 million, to “service its debt obligations”, Thames said.
Baggs said: “After spending all 30 years of my working life in the UK water industry, and having had the privilege of leading the largest company in the sector for the last six years, I have decided this is the right time for me to look for new challenges.
“I am proud of Thames Water and of what we have achieved for our customers, but there will always be room for improvement. Taking this decision now means that my successor can be in post in time to oversee the crucial task of preparing the company’s business plan for the next regulatory period.”
Sir Peter Mason, chairman of Thames Water Utilities, said: “Martin has been a highly successful chief executive and will be much missed by the board, his colleagues on the executive team and by the company’s staff. His energy and determination to achieve the best possible results, combined with his grasp of detail and knowledge of the industry, have made a huge contribution to the company’s recent successes, not least in the improvements in customer service and the successful launch of the Thames Tideway Tunnel project.
“Martin has also made a strong contribution to the water sector and to important discussions about the future infrastructure required to maintain London’s position as a major world city. He has done a really good job as chief executive of Thames Water and the board wish him well in whatever he decides to do next.”
Sir Peter added: “Martin has done us a service by making his intentions clear at this early stage. We will be commencing a search for a new chief executive early in 2016 and will aim to have the chosen candidate in post before the end of the year.”
Baggs has been a member of the company’s board since 2006 and was appointed chief executive in December 2009.