Norweb to freeze its prices: Domestic charges pegged as profits climb at electricity firm

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The Independent Online
NORWEB yesterday became the first regional electricity company to announce a price freeze for its domestic customers.

Ken Harvey, chairman, said the price would be held at current levels for 2 million customers until March 1995, provided the company faced no unexpected rise in costs.

The move, accompanied by a 14 per cent boost to the interim dividend, is expected to put pressure on other electricity companies to follow suit. But with the Government imposing VAT on domestic fuel from next year, it is unlikely to result in any saving on most domestic electricity bills.

'Subject to no uplift in input costs, our prices in 1995 will be less than four years ago. Norweb's prices remain among the lowest in the country,' Mr Harvey said.

Taxable profits climbed from pounds 54m to pounds 65m for the half-year to 30 September, on turnover up from pounds 611m to pounds 647m.

The interim dividend improved from 5.9p to 6.7p as Norweb reaffirmed its commitment to raise the annual payout by at least 6 per cent in real terms until the end of the decade.

Earnings per share advanced from 21.9p to 27.1p.

The results reflect a jump in distribution profits from pounds 50.3m to pounds 59.4m thanks to a 4.1 per cent rise in charges last April. In addition, operating costs have been reduced by cutting 117 staff, taking the division's workforce to 5,059.

The company plans to increase its capital spending by about pounds 25m to pounds 100m to modernise its ageing distribution network. The annual spend is expected to rise to pounds 120m by the year 2000.

Operating profits from electricity supply eased from pounds 4.3m to pounds 4.2m following a price cut, averaging 1.6 per cent, last July.

The group's electrical stores business lifted profits from pounds 1.6m to pounds 1.9m. Eight out-of-town stores were opened in the first half and seven more have started trading since.