A pension fund investor in Thames Water’s parent company has bought out a fellow shareholder, taking its holding to almost 20%.
The Universities Superannuation Scheme (USS) has acquired the 8.77% of Kemble Water Holdings Limited that has been owned by Wren House since 2017.
USS first invested in Thames the same year, buying an 11% stake and is already the second biggest shareholder in the water company, after OMERS, which owns 32%.
Thames now represents the single largest investment in the £82.2 billion (as at 31 March 2021) portfolio managed by USS’s investment management subsidiary.
The value of the transaction has not been revealed. Thames’ regulatory currently stands at £15.7 billion.
USS pointed to a “strengthened board” under chief executive Sarah Bentley and improving performance among the reasons for its investment.
Simon Pilcher, chief executive of USS Investment Management, said: “We are delighted to be making this further investment in Thames Water, a critical supplier to millions of people every day. Under its new management team, the company is juggling many priorities, such as net zero, that will require the kind of decades-long investment time horizon, as well as stewardship skills, that we can offer. We look forward to supporting on the next stage of the company’s journey.”
Thames’ chairman Ian Marchant said: “This increase in investment is testament to the company’s commitment to develop a long-term strategy to ensure a resilient water and waste service for generations to come. With a new experienced leadership team ready to turnaround the business, we are determined to become a water company our stakeholders, customers and employees can be truly proud of.
“Being innovative is important to our success and it’s something we’ve been particularly focused on alongside investing in the company’s infrastructure, customers, and our responsibility to the natural environment.
“We look forward to working with USS, alongside our other shareholders, to support the executive team to ensure Thames Water becomes a high performing company.”
This week also saw Thames release its half-year financial results, which showed a pre-tax loss of £581 million, compared to the same period (April-September) last year, with revenue up £100 million year-on-year, to £1.1 billion.
On its key performance indicators, Thames revealed water supply interruptions down to 3 minutes 46 seconds, from 3 minutes 54 last year. However, leakage rose from 538.7 megalitres per day to 577.6. A full list of the KPIs is listed below: