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- 📈 Thames Water: £3bn Down the Drain?
📈 Thames Water: £3bn Down the Drain?
Steel Yourself: Time to Buy British
This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes
In today’s stories:
Thames Water: £3bn Down the Drain?
Steel Yourself: Time to Buy British
BA’s £7bn Makeover: Will IAG Soar Higher?
The summary: Thames Water’s £3bn rescue bid is making waves with creditors, regulators, and misdirected millions, proving that saving Britain’s biggest water company is anything but a walk in the park.
The details:
Liquid Asset Drama: Thames Water, clutching just £500m in cash, is begging the High Court to bless its £3bn restructuring plan, hoping to stave off renationalisation and stay afloat until 2025.
Creditors Clash: While 75% of creditors are on board, a rebellious lower-tier group argues the plan favours Class A creditors and leaves everyone else high and dry.
Dodgy Dealings: Court documents reveal millions pledged for environmental fixes went instead to bonuses and investor payouts, adding to the company’s tarnished reputation.
Regulator’s Wrath: Ofwat slapped Thames Water with an £18m fine last December for breaking rules tying dividends to performance—spilling more trouble into their already murky waters.
Why it matters: Thames Water’s saga is a stark reminder of what happens when financial juggling meets murky management—it’s the nation’s pipes, not just their profits, on the line. With millions misdirected and creditors squabbling like seagulls over chips, the risk of renationalisation looms like a soggy sequel no one asked for. And let’s not forget, every pound they botch could mean more of us paying through the nose for the privilege of a decent cuppa.
The summary: The UK’s offshore wind surge is a golden chance to revive British steel, keep jobs local, and stop outsourcing our future — time to back our own!
The details:
Blown off course: Despite wind power generating nearly a third of the UK’s electricity in 2023, a mere 2% of the steel in our offshore turbines comes from British mills. Time to turn the tide, says UK Steel.
Raising the stakes: With offshore wind steel demand set to surge to over 1 million tonnes a year by 2026, the industry is calling for government pledges to “buy British” – or risk missing out on a golden opportunity.
A plate too late? UK lacks the capacity to produce enough plate steel for turbine towers and foundations, leaving it reliant on imports. UK Steel warns private investment won’t step up without firm government backing.
Pounds versus patriotism: Imported steel may be cheaper, but UK Steel argues spending a little extra could pay dividends at home. As CEO Gareth Stace quipped, it’s about value, not just cost – and British steel should be the default.
Why it matters: The UK’s offshore wind boom is a once-in-a-generation chance to rebuild our steel industry and keep the cash — and jobs — on home soil. Instead, we’re importing steel by the shipload while our own mills struggle to stay afloat. It’s like brewing the finest tea but outsourcing the teabags — sheer madness, really.
The summary: With a £7bn overhaul, British Airways is aiming to soar to new heights, and IAG’s shares could follow suit – though a few bumps, like delivery delays and engine issues, might make for a bumpy ride.
The details:
BA’s £7bn Transformation Takeoff: British Airways is mid-flight on a bold £7bn modernisation plan, aiming to lift operating margins from 10% in 2023 to 15% by 2027. Investments in AI, machine learning, and shiny new IT systems promise smoother skies ahead, despite lingering turbulence from delays and cancellations.
Gerald Khoo’s Crystal Ball: Panmure’s aviation guru foresees this overhaul tackling years of under-investment while trimming disruptions and unlocking better revenue – all without squeezing passengers for extra pennies. A spruced-up app and smarter revenue management are just the start.
Planes, Trains (Almost), and Supply Chains: IAG’s rising share price could hit turbulence if Boeing and Airbus can’t get their act together. Delivery delays and dodgy Rolls-Royce engines on 787s are causing a few headaches, though BA’s 280-strong fleet keeps the show on the road (or rather, in the sky).
Investors Buckle Up: Panmure slaps a 500p Buy rating on IAG, whose shares soared nearly 96% in 2024. With travel demand still roaring post-Covid, the big question is: just how high can IAG shares fly in 2025?
Why it matters: British Airways is banking on a £7bn overhaul to fix its past hiccups and take full advantage of a booming travel market, which could send parent company IAG’s shares soaring further. Investors have reason to cheer, but supply chain snags and aging engines could throw a spanner in the works. With high demand and ambitious plans, it’s a high-stakes game of "keep calm and carry on flying."
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