You joined Thames Water at the beginning of 2020 from financial services firm Phoenix where you were deputy treasurer. What attracted you to the role?
I had been keeping my eye out for a suitable group treasurer role, and this one appealed to me because Thames Water has a lot of debt-market-focused activity, which is an area where I have a lot of experience. I have also worked at National Grid and British Gas in the past and had a lot of relevant experience around regulation and funding for utilities. So, there was a good fit in terms of what Thames Water was looking for and also what I was looking for.
You began working at Thames Water in January and were on-site for eight weeks before lockdowns were imposed, so your introduction to the company has continued while working remotely. What has that been like?
Yes, I started work at Thames Water’s offices in Reading and attended quite a few introductory sessions with my own team, my boss and the finance teams closest to the treasury department – so I did manage to meet people. What I missed out on was all of those more casual introductions to people as you bump into them and as you start to work out who people are. I have had to learn about the organisation piecemeal and probably there are still people I haven't yet come across who, ideally, I would have met face to face by now.
What adaptations have you and the team made along the way?
We’ve managed to keep in close touch pretty well. We've been using Microsoft Teams as our video meeting system. Quite a few people in the treasury team had worked from home one or two days a week fairly regularly. So, we did have the systems tried and tested (apart from a Bloomberg terminal, where we had to move across to a disaster-recovery service initially).
What we hadn't done was have everybody working from home together and for the whole time.
When the lockdown happened, we found surprisingly that we could do nearly all the things that we normally would do remotely. We hadn’t expected it to work so well.
And there are some advantages. If you want to have a private conversation or a small group conversation it can actually be easier than in the office, where you might struggle to find a meeting room. Now you can arrange that kind of conversation ad hoc. The system we’re using shows a green, amber or red symbol against your name, so you can see who’s free, or at their terminal or in a meeting.
We have some chat groups running, like a ‘whole team chat’ that we can use if we need the whole team to be aware of something. That kind of thing has been working well and for that reason, we didn’t rush back into the office in September when things appeared to be improving.
Did you have a work plan for the year that had to be adapted as you went along?
I spent my first few weeks in the role just trying to get to know people and the key issues and hurdles that they face, and to understand in detail the funding needs and pressure points of the company. Thames Water has a whole business securitisation (WBS) funding structure, and although I've worked in utilities, I've not worked for a WBS company before. There are a lot of restrictions that you have to operate under.
The COVID-19 situation focused the mind on getting on with funding plans sooner rather than later. We did a Sterling bond issue in April. We had originally planned to look at the euro markets because we wanted to diversify our funding sources, and Thames Water already had a lot of Sterling in issue. However, the pandemic created uncertainty and ruled out the investor roadshow you’d expect to carry out. That’s not necessarily the backdrop you would choose when it comes to marketing your name to a new investor base.
That said, the euro market has been quite resilient, so we could have issued there if we had absolutely wanted to. We have done series of euro private placements, which initially involved one investor that gradually over the space of a couple of weeks built up to €500m just through private placements. So, we have achieved some diversification, even despite the difficult conditions in which the world has found itself.
The team has also been at work on a systems upgrade that we're hoping to carry. We were working with an old version of our treasury management system that hadn’t been upgraded since it was installed five years ago, so there are lots of features within later versions that we're not able to use at the moment. We're still working with the supplier on the upgrade and that's taken some time. Meanwhile, we are also trying to use our existing system more because it isn’t being used as fully as I would expect and having the upgrade in place will make this easier to achieve.
Thinking about the group treasurer role, what have you learned this past year?
Ours is a relatively small team for the size of the business – and most people on the team are quite new to Thames Water or new to treasury. Some have come from other places bringing experience with them, but others are relatively new to treasury, coming from accounting roles. So, I would say this is a team in development.
It is also quite lean. During the year, we did have some people that have been ill, possibly with COVID-19, and it can put the rest of the team under pressure in terms of being able to share out the workload. It also makes it more difficult to implement efficiencies, because you're so busy trying to get the necessary work done that you haven't got that little bit of extra resource that you would need to look at improving efficiencies, but we are getting there.
Longer term, it's all about the economic implications of the pandemic and how that affects our investment plans and our funding plans.
Are you worried about Brexit in terms of financial markets?
Well, it's a bit of an unknown, isn't it? You would hope that both the UK and the EU would prioritise making financial markets work, especially considering the COVID-19 backdrop. And I think they have taken steps to protect the financial markets from Brexit, so I'm hopeful.
Is there anything you're particularly proud of?
Given the fact that we can't meet up, I think we have managed to keep the team working well together as a unit. We've kept our connectivity. We hold a daily team call and even if there's not a huge amount of work-related information to be shared that day, we will always have a bit of a conversation together as a team. That has helped.
We've actually had a new member of staff join, who we had to interview remotely, and also one of the finance graduates already in post at Thames Water rotated into treasury. And we've had to integrate so that everybody gets to know others in the team. That's the bit that I'm most proud of – keeping the cohesiveness of the team going despite the remote working.
Liz Loxton is editor of The Treasurer