BUSINESS LIVE: Thames Water plans extra £1.1bn green spend; Asda profits soar; Mobico suffers railway delays

Asda’s profits soared 24 percent last year, reflecting a 7.1 percent rise in total sales, while Britain’s third-largest supermarket group also slashed its debt.

Asda, owned by brothers Zuber and Mohsin Issa and private equity firm TDR Capital, said adjusted EBITDA after rent for 2023, its preferred profit measure, was just shy of £1.1 billion. on total sales, excluding fuel, of £21.9 billion.

Comparable sales increased 5.4 percent.

However, monthly industry data has shown that Asda consistently underperforms its biggest rivals – market leader Tesco and number two Sainsbury’s.

Data from market researcher Kantar, published last month, showed Asda had a 13.8 percent share of the British grocery market, down 50 basis points on the year.

Asda has been burdened by financial costs due to high levels of debt since Issas and TDR bought the business from Walmart in a £6.8bn deal in 2020 that left the US giant retaining a 10 per cent stake.

Net debt at the end of 2023 was £3.8bn, net of more than £1bn of cash on the balance sheet.

It said that more than 90 percent of this debt is secured by fixed interest rates and that it is “fully committed to further deleveraging.”

Royal Mail will hold fresh talks with investors this week as a billionaire nicknamed the Czech Sphinx plans another bid for the 500-year-old postal service.

Top brass at Royal Mail owner Service International Distribution are understood to be holding regular talks about billionaire Daniel Kretinsky’s approach and have been holding talks with shareholders.

Before making new offers, IDS will be interested in hearing the opinion of other investors.

Thames Water has proposed a further £1.1bn to spend on environmental projects over the next five years in an effort to win the support of regulators, as it struggles to survive amid £16bn debt and the looming threat of nationalization.

The provider fell into crisis last month when its owners labeled an existing business plan as “non-investable.”

Under the new plan, Thames Water, which supplies around a quarter of the British population, will say the increase in spending will go towards projects that benefit the environment and will come without a bigger increase in customer bills than the already planned.

While that may help win over regulator Ofwat, the company also needs to win the support of its shareholders, who in March refused to invest a £500m capital lifeline.

Thames Water boss Chris Weston said the updated business plan focused on its customers’ priorities.

“We will continue to discuss this with our regulators and stakeholders,” he added.