Dividend rises 32% at London Electricity: Increase to 7.4p at interim stage well ahead of others in the sector

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The Independent Online
LONDON Electricity took the City by surprise yesterday by announcing a 32 per cent increase in the interim dividend to 7.4p from 5.6p a year ago - far outstripping the rise in payouts from other regional electricity companies in the reporting season to date.

The company said that the increase reflected a decision to rebalance the proportion paid at the interim stage and that the underlying growth was 13.5 per cent. The share price rose by 13p on the news but fell back to close unchanged at 644p.

Pre-tax profits rose by 34 per cent to pounds 69.9m in the six months to September from pounds 52m a year ago. Earnings per share increased by 35.6 per cent to 24p from 17.7p at the same time last year.

The results were helped by a pounds 5.3m contribution from the electricity network operations of Heathrow, Gatwick and Stansted airports, acquired from the British Airports Authority.

At the same time London benefited from an end to losses from the electrical retailing arm, now in the process of being acquired through a management buyout. Electrical contracting and gas supply made a profit in the first half of the year.

The workforce was reduced by 450 between April and September, including a fall of 150 in the core electricity distribution and supply business. The company is shedding jobs in the core business at a rate of between 2 and 3 per cent a year.

John Wilson, the chairman, said there were signs of a gradual upturn in the London economy. New service inquiries were up 32 per cent year-on-year and services installed had risen by 13 per cent.

'Recent decisions to proceed with infrastructure developments such as the Jubilee Line and the Docklands Light Railway extensions, together with an improved outlook for the property sector, should underpin sales growth,' Mr Wilson added.

The company yesterday announced the appointment of Michael Kersey as energy services director and Andrew Robertson as company secretary.

It was revealed recently that Sir Bob Reid, chairman of British Rail, will become non-executive chairman on Mr Wilson's retirement next March.