British Energy returns pounds 432m and looks abroad

BRITISH ENERGY, the nuclear power generator, is to return pounds 432m to shareholders and speed up its search for overseas acquisitions after being frustrated in its efforts to expand in the UK electricity market.

Peter Hollins, chief executive, admitted that the group was disappointed to be outbid in the auction for London Electricity and blocked by the Government from buying one of PowerGen's coal-fired stations. BE is now the UK's biggest electricity generator, with a 21 per cent market share.

But he said BE was still interested in acquiring a regional electricity company or supply business, possibly from Welsh utility Hyder, which yesterday confirmed that the energy supply business of South Wales Electricity was for sale.

BE is also extending the lives of two more of its advanced gas-cooled reactors, and expects the Government's de facto moratorium on gas-fired power stations to be lifted this year, allowing it to increase its UK generation interests.

The overseas expansion will see BE acquiring more nuclear electricity stations in the US, but Mr Hollins said it was also interested in buying non-nuclear businesses in both the US and Europe. BE has already bought Three Mile Island and is completing the purchase of two more US nuclear stations. Mr Hollins said the aim was to build a portfolio of six to eight US nuclear facilities.

Details of the pounds 432m distribution - equivalent to 60p per share or 10 per cent of BE's market value - will be spelt out in June, accompanied by a share consolidation of 43 shares for every 48 existing ones.

Michael Kirwan, BE's finance director, said the plan was to optimise the interests of all shareholders, including the 275,000 small investors who own 17.5 per cent of the company.

Even after the handout BE will be virtually ungeared and generating free cash at the rate of pounds 300m a year. Analysts speculate it may return more cash if it cannot find acquisitions.

Although BE will have the firepower to spend up to pounds 2bn on acquisitions, Mr Hollins said buying more US nuclear plants would not entail a big outlay. Meanwhile, the plan to expand into non-nuclear generation is at a very early stage; BE has yet to draw up a target list.

One analyst said BE's expansion strategy appeared becalmed. "The company has been blocked from buying a Rec, outbid by the French for London Electricity and is for the moment prevented from going further into gas-fired generation. It is generating huge amounts of cash, and yet it has not identified any sizeable overseas business on which to spend the money."

Confirmation of the return of capital to shareholders came as BE reported a 56 per cent rise in pre-exceptional profits last year to pounds 298m. It also said it was extending the lives of the Torness and Heysham 2 stations to 35 years, which will boost profits by a further pounds 25m.

Despite this, the shares fell 20p to 597p. Analysts said this partly reflected the lack of obvious growth opportunities for BE, which would remain a hold until its expansion strategy began to bear fruit.

PROMOTED VIDEO
News
Happy in his hat: Pharrell Williams
people
Life and Style
Visitors look at a drone equipped with cameras on a police car at the Gitex Technology week in Dubai
tech
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
News
i100(More than you think)
Arts and Entertainment
John Hurt will voice Prince Bolkonsky in Radio 4's War and Peace
radioRadio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
News
i100
News
people
News
ebooksNow available in paperback
News
news

Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity

Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
filmDirector said film would 'never have been financed' with ethnic minority actors in key roles
News
The author PD James, who died on 27 November 2014
people

Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94

Arts and Entertainment
Jennifer Lawrence as Katniss Everdeen in The Hunger Games: Mockingjay Part 1
arts + ents
Life and Style
tech

Sites using the popular Gigya comment platform were attacked by the Syrian Electronic Army (SEA)

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?