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Thames Water has reported a 50 per cent increase in half-year profits, with improved operational efficiency having boosted the firm's performance.

In a statement today the water company revealed its pre-tax profits climbed to £199.7 million in the six months to September 30th.

The utilities firm, which was criticised by industry regulator Ofwat last year over its poor leakage record, also revealed it had reduced the amount of water lost through its pipes.

Thames Water, which provides drinking water to around 8.5 million customers in London and the south-east and manages waste water for approximately 13.5 million others, said it had lost an average of 695 million litres per day (mld) over the six-month period.

It said the figure represented an improvement of around 120 mld on the amount lost over the corresponding period of last year and revealed it was already ahead of its leakage target for the full-year.

Thames Water stressed it was also ahead of target in terms of laying new water mains. The company confirmed it had laid 266km of new water mains since April, against its aim of laying 362km by the end of the financial year.

Meanwhile the company reduced its operating costs to £462.1 million over the half-year period, representing a 9.8 per cent fall on the previous year and reflecting operating efficiencies.

Welcoming the results, Thames Water chief executive David Owens said a "back to basics" strategy had resulted in the group's improved performance.

"The legacy of high operating costs and inefficient working practices has now been put behind us, and the past nine months have seen the company make huge strides to address the issues which really matter to our customers and stakeholders: tackling leakage, improving customer service and providing consistently excellent water quality," he explained.