Lower costs boost Eastern Electricity

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The Independent Online
COST-CUTTING and manpower reductions allowed Eastern Electricity to increase interim pre-tax profits by 14 per cent to pounds 77.4m in the six months to 30 September, writes Mary Fagan.

The company, one of the largest of the 12 regional electricity suppliers in England and Wales, has reduced staff by 1,250 since September 1992 and plans to cut about 200 more jobs by the end of this financial year.

John Devaney, chief executive, said Eastern's efficiency had been helped by better use of information technology and a reduction in customer service centres from 10 to two. He said the company would continue to drive down costs in the main electricity business and to pursue non-core projects in gas supply and power generation.

Turnover fell 5 per cent to pounds 799m, mainly because of rebates paid to customers. Yesterday Eastern announced a pounds 15m rebate - about pounds 5 per customer - related to lower-than-expected electricity purchase costs. The rebate, the second in nine months, must be paid under the rules governing the industry.

Earnings per share rose 14 per cent to 20.9p in the six months to 30 September and the interim dividend rises to 6.6p from 5.5p. Included in the results is an interim dividend of pounds 7.4m from the National Grid Company, in which Eastern has a 12.5 per cent stake.