National Power to consider job cuts

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The Independent Online
NATIONAL POWER, Britain's largest electricity generator, which shed 1,400 jobs last year, said that further reductions may be needed as competition in the market increases. Despite overseas expansion, the company's workforce has shrunk to 6,000 from 17,000 four years ago.

National Power, which increased pre-tax profits by 17 per cent to pounds 677m in the year to 27 March, now expects the Government to sell its remaining 40 per cent stake in the company in February 1995.

The sale of the Government's holdings in the company and its rival, PowerGen, is expected to raise about pounds 4bn.

John Baker, chief executive, said the company's electricity sales dropped 13 per cent last year because of new entrants to the market and the increased share taken by nuclear power. 'You have to work very, very hard at cutting costs to stay ahead,' he said.

The group's total turnover fell 16 per cent to pounds 3.6bn from pounds 4.35bn a year earlier. Headline earnings per share rose by 19 per cent to 40.2p from 33.9p the previous year and the dividend increased by 18 per cent to 12.5p. The company plans to reduce dividend cover over the next two years, giving scope for further substantial dividend growth. National Power's shares rose by 2p to close at 439p.

The company announced plans to proceed with its fourth and largest gas-fired power station at Didcot, in Oxfordshire, which should come on stream in 1996. There is also consent to build a fifth gas-fired station at Staythorpe in Nottinghamshire but as yet no firm plans to build.

Mr Baker said National Power's share of the generating market fell to 35 per cent during the year to 27 March from 41 per cent the previous year. He expects market share to stabilise at 30 per cent within a few years.

The company plans to become a player in the international generating market, with investment of about pounds 1bn by the end of the decade. National Power has spent pounds 200m overseas so far, mainly on the acquisition of American National Power and an investment in the Pego power station consortium in Portugal.

Under pressure from Offer, the regulator, the company is considering the sale of about 4,000 megawatts worth of power plants to increase competition.

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