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4 | 23RD - 29TH JUNE 2017 | UTILITY WEEK Financials from Thames Thames Water has released its annual report including its financial statement for 2016/17. The report showed: £605m Underlying operat- ing profits dropped from £742.2m in 2015/16. £71.1m Profit before tax dropped from £511.2 million. The decline was due to fair value loss on financial instru- ments, increased costs and lower property sales. £1.1bn Of capital invest- ment was made in the past financial year, with around £12 billion invested in the past 12 years. £100m The dividend distributed to shareholders. £18.4m The amount the company incurred in penalties in 2016/17 for miss- ing outcome deliv- ery incentives. 94.5% The proportion of customer com- plaints resolved first time, com- pared to 90.9%. STORY BY NUMBERS Seven days... National media SSE awards chief executive 72% pay rise SSE risked stoking further con- troversy about how much energy companies are making from hard- pressed UK households by reveal- ing that its chief executive received a 72 per cent pay increase last year. Alistair Phillips-Davies, who has been chief executive of the FTSE 100 energy company since 2013, received more than £2.9 million for the 12 months to 31 March, up from £1.7 million the year before, the group's annual report showed on Friday. Financial Times, 16 June Centrica boss says customers should not stay on costly tariffs Energy suppliers should not be allowed to keep customers on pricy standard variable deals indefinitely, the boss of British Gas's owner has said. Iain Conn, chief executive of Centrica, believes putting house- holds on fixed-term deals would be a more effective way of driving down bills than a price cap. Conn said the competition watchdog's report on the industry last year had shown that "not enough customers are engaged, not enough are actively choosing to change" their deals. Times, 18 June Smart meters are not so smart after all The "smart" energy meters due to be installed in every UK home are in fact "pretty dumb", a senior execu- tive at Centrica has said, suggesting a new type of meter that can moni- tor individual household appliances and identify problems should be rolled out instead. Charles Cameron, director of technology, said the company was trialling "super smart" meters in Cornwall and they could be ready to deploy more widely in six months. Times, 16 June Cox says there must be radical reform at Thames Water T hames Water must make an urgent "step change in the way it operates and behaves," according to Ofwat chairman Jonson Cox, who has set out a challenging five-point plan for reform of the UK's largest water company, writing exclusively in Utility Week. In an unprecedented move by a sitting regulator, Cox has commented publicly on the row surrounding Thames' finances and service performance. He has called on Thames to make five commitments, including an immediate review of the board's composition and action on executive pay. Other commitments cover customer communication; an annual, audited statement from the board; and transparency and clarity around financial returns for investors. Setting out his requirements of Thames, Cox writes: "I call on the company to adopt these five commitments quickly, and discuss with us how it will meet them. We may ask the same of others in the industry too, as we evolve our ground-breaking approach to reforming board leadership in public service providers." Thames Water came under fire last week aer the publica- tion of its annual report. The document confirmed a £100 mil- lion dividend payment for shareholders at the same time as revealing that the company missed its 2016/17 leakage reduction target by 47 million litres a day. Ofwat announced it will conduct an investigation into the company's performance on leakage in addition to issu- ing a "maximum penalty" of £8.6 million. In his Utility Week col- umn, Cox reiterated that the regulator will be "thorough" in pursuing this investigation. He added that his outcome will be "transparent" and "if appropri- ate, it could bring sanctions beyond the penalties that flow automatically from our perfor- mance regime." Read Cox's full column, Holding Thames Water to account, p7