Eastern Electricity to split top roles

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The Independent Online
EASTERN Electricity is to split the roles of chairman and chief executive. The move, which finalises the management restructuring set in train after privatisation, was announced as Eastern reported a 34.5 per cent increase in pre-tax profits to pounds 143.1m.

James Smith, the chairman and chief executive, said that Walter Waring would retire as managing director in August and be replaced by John Devaney, currently chairman and chief executive of Kelsey-Hayes Corporation in the US. Mr Devaney will assume the chief executive's role at a later date. Mr Smith is expected to retire in 12 to 18 months.

Eastern, the last of the regional companies to report, said that turnover rose by 9.2 per cent to pounds 1.88bn from pounds 1.72bn a year earlier. Earnings per share rose by 29.5 per cent to 38.6p from 29.8p. The board is recommending a 15.6 per cent increase in the total dividend to 16.7p.

Eastern said that profits would have been pounds 12m higher had it been able to recover money due to it after undercharging the year before. It was prevented from recovering the money by regulatory price constraints.

Mr Smith said that the greatest challenge facing the industry is the role of the regulator, Offer, and the forthcoming price review in the industry. 'We predict there will be a foregoing of profit streams in order to reduce the regulatory risk.' But he said that Eastern, whose average charges per household are the lowest of all the regional firms, is on a firm footing.

The company said that the dividend policy is to provide real increases and to move toward a cover of 2.5 times compared with 2.3 times now.

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