H2Woe
The business news that matters
A scheduling note: Off to Lunch will be taking an Easter break from today. We will return on Monday April 8
Hello and welcome to the latest edition of Off to Lunch…
Firstly, thanks to Joel Hills, ITV’s business and economics editor, for today’s headline on the problems facing Thames Water…
Thames Water is on an urgent hunt for cash. The company’s existing investors have said they will not pump in an initial tranche of £500 million needed to shore up its balance sheet and fund investment in its infrastructure. These shareholders include Canadian pension fund Omers, the Chinese and Abu Dhabi sovereign wealth funds, and UK pension funds such as Universities Superannuation Scheme and Hermes.
Thames Water is the biggest water company in the UK. It supplies water in London and the south-east. However, the business is battling with debts of £18 billion.
The shareholders have said that the business is “uninvestible” unless it can increase customer bills significantly.
Chris Weston, chief executive of Thames Water, has told the BBC that bills need to rise by 40 per cent by 2030 to pay for improvements in infrastructure. However, Ofwat, the industry regulator, has opposed price rises of this scale.
The financial problems facing Thames Water mean it could face nationalisation or a debt-for-equity swap - where existing shareholders would be wiped out. However, Weston has insisted that the company is a "long way off” a special administration and that services to customers will not be impacted.
Nonetheless, the comments below from Feargal Sharkey, the singer turned clean-water campaigner, neatly summarise Ofwat’s position on Thames Water’s problems…
Podcast…
The latest episode of our Business Leader podcast looks at how Duncan Clark went from an environmental journalist at The Guardian to the centre of one of the fastest-growing tech companies in the world - Canva, which offers free online tools for graphic design and has been valued at $40 billion (£32 billion). This is the story of how he built a business, sold it to Canva, and is now leading the company’s ambitious expansion plans in Europe
You can listen to the episode on Substack here, Spotify here and Apple here
Other stories that matter…
1. Artificial intelligence chatbots that claim they can predict future share price movements in companies and evade plagiarism detectors are the most popular on OpenAI’s app store, according to new data. Story here
2. Commuter journeys in London are still roughly 20 per cent lower than they were before the Covid-19 crisis, according to a fascinating piece of research on travel patterns in big cities by the Financial Times. You can read this research here
3. Sifted has published its guide to the 100 fastest-growing startups in the UK and Ireland. Allica Bank, which is targeting small and medium-sized businesses, is number one on the list. Nearly a third of the businesses that featured in the list were in fintech. You can read more here
4. Geary’s Bakeries Limited was founded in 1906 in the East Midlands. However, the business has grown rapidly in the last few years thanks to new demand for its sourdough bread. The Economist has done a case study on the business, which you can read here
5. Daniel Kahneman, the Israeli-American psychologist, economist and author has died. His work was incredibly influential on modern thinking about decision-making and why humans are inherently biased. You can read an obituary by The Telegraph here
The new Business Leader…
The new Business Leader website and magazine have now launched. We are building a new inspirational, aspirational and agenda-setting business publication for the UK. You can read our analysis, interviews and expert columnists on our website by clicking the image below. Our new magazine is now available in shops and you can subscribe to your own print or digital version by clicking here
And finally…
I want to take this opportunity to wish all Off to Lunch and Business Leader readers a happy Easter. As mentioned above, Off to Lunch will be taking a break over Easter and we will return on Monday April 8. I look forward to seeing you then.
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