E Midlands lifts dividend 18.9%: Payout maintains industry's strong dividend performance

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The Independent Online
REGIONAL electricity company shares rose again yesterday after East Midlands Electricity lifted its interim dividend 18.9 per cent to 6.8p. The announcement followed higher-than-expected payouts from both Midlands and South Wales Electricity earlier in the week.

John Harris, chairman, said shareholders should not expect a rise of such proportions in the final dividend because part of the interim increase was to restore the 30:70 interim/final balance in the dividend.

Profit before tax rose 13.3 per cent to pounds 64m after improvements at the operating level in both the distribution and supply businesses.

Mr Harris said the programme to reduce costs by pounds 15m a year was on target. More than 100 of the 500 jobs due to be cut this year had gone during the first half. A pounds 6.3m increase in provisions covers all the reorganisation costs for this year.

The company distributed 10.8 billion units of electricity in the period, a real increase of 4.3 per cent thanks to a few extra days and colder weather. Stripping out these benefits, real volume growth was about 1 per cent. Distribution revenue at pounds 176.5m was 11.8 per cent higher.

The strategy of targeting smaller businesses and offering additional services boosted operating profit 22.2 per cent to pounds 6.6m on turnover down 2.2 per cent to pounds 666.2m.