Fall likely at Manweb's distribution business

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PROFITS in Manweb's core electricity distribution business are likely to be lower this year, according to John Roberts, chief executive, because of exceptional provisions for early staff retirement and weaker higher-margin sales to commercial and domestic customers, writes Terence Wilkinson.

First-half distribution profits fell by 8 per cent to pounds 40.6m because of these factors and a decision to freeze charges to its wholesale supply business for 1992/3. Provisions for early retirement jumped from pounds 2.2m to pounds 4.1m.

Despite this setback, which Manweb does not expect fully to recover in the second half, pre-tax profits in the six months to 30 September rose by 34.9 per cent to pounds 37.1m. This stemmed from an pounds 11m rise in wholesale supply and a pounds 2.8m cut in interest charges to pounds 1.3m, reflecting lower working capital. The interim dividend is 11.9 per cent higher at 5.45p.

A restructured retailing and a contracting operation broke even, although contracting suffered reorganisation charges of pounds 600,000.

Manweb, the only regional electricity company with no interests in gas-fired power generation, has invested pounds 1.7m in two wind farms.