Exports spark Scottish Power: First-half profits up 21% as generator looks for higher sales to England and Wales

Click to follow
The Independent Online
EXPORTS of electricity into England and Wales helped Scottish Power to increase pre-tax profits by 21.5 per cent to pounds 115.7m in the first half of the year. The company, the larger of the two electricity firms in Scotland, has more generating capacity than it needs to meet demand in its franchise area and expects sales south of the border to soar over the next few years.

Ian Preston, chief executive, said the recent upgrade in the transmission link to England and Wales would increase the company's ability to export by 75 per cent from 1994/5 onwards. Within a few years, sales to England and Wales could be equivalent to one-third of sales within Scottish Power's home market, he said.

The company sells to regional electricity supply companies south of the border, direct to large industrial and commercial customers and into the electricity trading 'pool'. From 1997, Scottish Power also plans to export power to Northern Ireland.

The underlying increase in pre-tax profits in the six months to 30 September was 6.6 per cent after adjusting for exceptional items in the first half of last year. Earnings per share rose by 27 per cent to 10.78p and the board has recommended an 11 per cent increase in the interim dividend to 4.13p.

Profits were also helped by cost-cutting and by a reduction in coal prices. The company's workforce has fallen from almost 9,500 in 1991 to 7,610, of which 5,900 are employed in the core electricity business.

Duncan Whyte, chief operating officer, said workforce reductions would continue as the company sought to match best practice in the electricity industry around the world. He has also agreed with unions on a two-year flexible working deal that will allow Saturday to be treated as a normal day without overtime payments, and which may expand the working day to 8am to 8pm.

Scottish Power's contracting and retail businesses remained in profit in the first six months of the year. The company has 100 retail outlets in Scotland, accounting for 30 per cent of the white goods market and one-tenth of the market in brown goods. Scottish Power is also in the gas supply business through its subsidiary, Caledonian Gas, and has won a licence to provide telecommunications services to business customers.

Mr Whyte said there was a ban on expansion outside the UK. 'It is not for want of offers, but we have enough to do here,' he said.

(Photograph omitted)

Comments