BG profits get pounds 600m pension fund boost
Wednesday 24 February 1999
News of the boost to profits came as BG indicated that shareholders are likely to see a payout of pounds 1bn-pounds 2bn this year as part of an overhaul of the group's balance sheet.
Profits were swollen by pounds 101m last year because of the pension surplus and will remain pounds 70m-pounds 80m a year higher over the next six years.
BG said that because its pounds 12bn pension fund was pounds 1bn in surplus, it was now able to release a pounds 600m provision built up over the years ago to protect against any deficit in the fund.
The company's 100,000 pensioners will not benefit directly from the release of the provision. But BG said that its pension scheme was already one of the most generous available.
Pension benefits are index-linked, members contribute only 4 per cent of pay and the scheme allows employees to retire on a full pension of two-thirds final salary from the age of 50 onwards.
David Varney, BG's chief executive, said the company's priority for this year was to improve its capital structure by loading the balance sheet up with debt.
This could allow BG to raise gearing from 40 per cent to between 50 and 60 per cent, giving it up to pounds 2bn in spare capital to play with.
Mr Varney ruled out a bid for either Enterprise Oil or Lasmo and indicated BG was not about to hit the mega-merger trail, saying asset prices were still too high. "My job is to look after my shareholders' interests, not somebody else's. Fifty per cent of these mergers end in misery and we are not paid to take evens bets," he added.
He was speaking as BG reported an 8 per cent rise in pre-tax profits last year to pounds 1.227bn and said it was merging its exploration and production and international downstream arms. However, Mr Varney said this was not a prelude to a demerger of the new division from its pipeline arm Transco.
Despite the bleak outlook for oil prices, BG is doubling its oil and gas exporation programme this year to pounds 400m. This will be coupled with an intensified drive to cut costs but job losses among Transco's 14,000 workforce would be modest compared with the 2,500 cutbacks last year.
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...