Cost cuts boost Scottish Power

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STAFF reductions and lower fuel costs lifted Scottish Power's pre- tax profits by 16 per cent to pounds 95m in the first half from pounds 81.9m a year earlier. The company, which has shed 1,200 jobs since March 1991, also benefited from increased electricity sales in England and Wales.

Ian Preston, Scottish Power's chief executive, said Scotland was only just beginning to feel the effects of recession as measured by electricity sales. He warned of greater inroads into consumption during the second half of the year.

The company announced a 10 per cent increase in interim dividend to 3.72p. Despite a decline in industrial electricity sales, turnover in the six months to 30 September rose to pounds 634.8m from pounds 599m. After provisions of pounds 23m to cover restructuring, earnings per share rose 6.7 per cent to 8.47p.

Mr Preston said that his strategy was to continue the drive to cut costs and increase efficiency. Scottish Power has contracts with British Coal that run for two more years, but it has been switching more to cheaper imported coal.

He said Scottish Power would increase electricity exports to England, Wales and Ireland in the medium and long term.