Blairgowrie company Castle Water could become responsible for supplying more than 16 million homes in and around London as it seeks to become the majority shareholder for Thames Water.
The Courier understands the Perthshire firm is eyeing a bid to take control of the embattled English company, which had revenues of more than £2.5 billion last year.
Thames Water has come under a barrage of criticism over repeated sewage pollution incidents.
Major Perthshire employer Castle Water already facilitates non-household customers for Thames Water, after buying the portfolio in 2017.
Castle Water Thames Water rumour
A source at Castle Water said they had a strong record in customer care management across the UK, including with non-household consumers currently with Thames Water.
The company has finance readily available for any purchase, and is currently England’s largest independent water supplier.
Castle Water has already acquired and integrated the customer books of four wholesalers — Thames, South East, Portsmouth and Affinity.
This, they said, puts them in an ideal place to be considered for the majority share purchase.
As reported in the Financial Times, Castle Water recently signed a non-disclosure agreement to potentially provide new equity funding for Thames Water, allowing the company to conduct due diligence on the utility’s private financial information.
The beleaguered English firm recently secured a £3bn loan aimed at averting a complete company collapse which could see it renationalised by the UK Government.
Water provision is privatised in England and Wales and has been since 1989.
Chief executive John Reynolds would not be drawn on the potential purchase when approached by The Courier.
‘Strong results’ for Castle Water
Castle Water reported revenues of more than £434 million in its latest accounts.
Despite this, the company recorded a pre-tax loss of £2.1m to the end of March 2024.
Mr Reynolds said Castle Water had enjoyed a “strong” year.
He highlighted a growth in earnings before interest, taxes, depreciation and amortisation (EBITDA).
This had risen by 43% on the year before, to £15.1m compared to £10.6m in 2023.
“We have had a strong performance in all areas and we are in a very good position heading into 2025,” Mr Reynolds told The Courier.
In his report, he added: “Financially, we have seen robust growth in gross profit as our strong business development performance continues through our commitment to targeted profitable customer acquisition and retention.
“Adjusted EBITDA growth of over 40%, alongside strong cash generation in the year, stems from our continued investment in operational improvements and our functional cohesion.
“Our success is not measured simply by financial gains but by the strides we have made in market performance standards.”
Staff praised
Castle Water employs more than 440 people and is headquartered on Boat Brae in Blairgowrie.
He continued: “This achievement is underpinned by the work of our directly employed metering field team, whose initiative and expertise contributes greatly to the accuracy and reliability of our billing.
“Our commitment to sustainability and corporate responsibility remains a cornerstone of our strategy.
“As we look to the future, we are enthusiastic about the opportunities that lie ahead.
“Our investment in technology and customer service platforms will further boost our delivery of outstanding service to our customers.
“With a focus on pioneering development coupled with sustainable growth, we are well-prepared to navigate the challenges and opportunities of the coming years.
“Thank you to our dedicated staff, loyal customers, and all our stakeholders for your continued support.
“Your trust and partnership propel us forward, and together, we are setting new standards for excellence in the water retail industry.”
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