An industry in the sewer

Another day, another example of bad behaviour at the poster child for the shortcomings of privatisation – thames Water. this provider of water and sewage services in London and surrounding locations lurches from crisis to crisis, damaging the environment, letting down consumers and giving private ownership a filthy name.

When Jeremy hunt, in his Autumn Statement, summoned up the spirit of Sid, the iconic small shareholder of the 1980s, to raise enthusiasm for the sale of the state’s remaining stake in natWest, he may have hoped that thames Water would have slipped our minds.

But it is not possible, even though the business is no longer listed.

Yesterday, thames announced a 54pc decline in half-year profits, but also a turnaround plan, designed to repair its decrepit infrastructure and reduce its £14.7bn debt.

Despite a pledge to be more ‘honest’, it emerged that it was being investigated by the industry watchdog ofwat over the payment of dividends to its parent company – apparently to finance even more debt.

ofwat can prevent companies from making payouts if they imperil financial strength, and dividends must be linked to performance standards.

the disclosure over the dividend distribution comes just days after a controversy over whether a £500m injection from shareholders was actually a loan, not equity, as thames (a specialist in such sophistry) claimed. however, since ofwat has scarcely been a muscular regulator, perhaps it feels that it can shake off ensure.

the major shareholders include Canadian pension fund omers, the China Investment Corporation sovereign wealth fund and the Universities Superannuation Scheme.

together, they are expected to produce a further £750m, but before they part with this, they must insist on more clarity from thames about nature of its byzantine connections with its parent company.

Investors may not fear renationalisation, given the enormous cost. But such is public disaffection with water firms that Labour may still pop a proposal into its manifesto.

the murky goings-on give not only privatisation a bad name, but also call into question the Government’s role. It has tolerated a toothless watchdog and put extra costs on customers and taxpayers, who may end up paying to mend leaky pipes.

If you see hunt or Business Secretary Kemi Badenoch, tell them!

Making a getaway

the oxford University Press word of the year is ‘rizz’, the tiktok generation’s term for charm and sexual appeal.

‘revenge spending’ was not considered, although it sums up a key post-pandemic trend. there are things on which we scrimp, but others on which we will splash out, following the privations of lockdown.

the 18.7pc rise in full-year revenues at online travel agent on the Beach to a record £170.2m shows that revenge spending on holidays is going strong.

Shaun Morton, its chief executive, says most consumers are seeking to ‘protect – not sacrifice’ their break.

Shareholders will be cheered to learn getaways have recovered their rizz, and by the news of a dividend next year.

the figures lifted shares 17.9pc, although they remain 66pc down over three years. the road back to this level may be shorter if on the Beach can deploy its tech to disrupt the long haul end of the market.

Another focus will be its battle against what it calls the ‘anti-competitive behaviour’ of low-cost airlines like ryanair which, it is claimed, block the firm’s bookings.

Between on the Beach and ryanair, there is a distinct lack of rizz. the Competition and Markets Authority should intervene to foster a better working relationship.

Saucy proposition

WhAt does it take to boost grocery market share? A premium range helps, as the latest Kantar data suggests.

tesco offers tesco Finest, while Sainsbury’s has taste the Difference.

Aldi and Lidl, meanwhile, provide discounts, plus the thrill of the bazaar. the diverse merchandise of Lidl has irresistible appeal. Asda and Morrisons are flagging.

It would be shameful if these once-proud British names became yet more examples of the detrimental effect of private equity ownership which loads businesses with debt but starves them of investment.

People want a bargain – and that secret sauce: composed, attractive prices and exciting displays that make you put more into that trolley.