ScottishPower warns of impact from price reviews
Thursday 04 November 1999
The warning increased the possibility that the group, which also owns the regional electricity supplier Manweb and Southern Water, will be forced either to cut the payout or appeal to the Competition Commission.
ScottishPower refused to spell out what the financial impact would be of the four price reviews - three in electricity and one in water. But analysts estimated they could wipe pounds 90m off group operating profits next year and pounds 250m off revenues.
Announcing flat operating profits of pounds 325m for the first half of the year, Murray Stuart, the chairman of ScottishPower, said that, if implemented, the reviews would have "serious implications for customer service, infrastructure investment and shareholder returns".
It was "vigorously" pressing the two regulators, Ian Byatt of Ofwat and Callum McCarthy of Ofgem, to reconsider, he added.
ScottishPower is particularly angry about the proposed 16 per cent reduction in Southern Water bills next year and cuts in electricity supply charges ranging from 7 per cent for customers in Scotland to 11 per cent for those of Manweb.
Ian Robinson, the chief executive of ScottishPower, criticised the energy regulator for maintaining price controls when the electricity supply industry was open to full competition.
Despite the threat to profits and dividends, ScottishPower shares ended the day 18p higher at 595p amid mounting expectations that its pounds 4bn takeover of the US electricity company PacifiCorp will be completed before the end of next month.
ScottishPower has applied to US regulators for permission to raise prices by around $150m in the six states in which PacifiCorp operates. It also expects to achieve cost savings of $100m-$200m over a four-year period.
The takeover has been approved by four out of the six states and ScottishPower is now awaiting the green light only from Idaho and Utah.
Pre-tax profits fell by 25 per cent to pounds 185m due to pounds 55m of write-offs in its telecom business, Thus, which is being floated this month. The charges relate mainly to the closure of its fixed-radio-access business licenced from the collapsed telecoms operator Ionica. But Ian Russell, the deputy chief executive, estimated the Thus flotation would net ScottishPower a profit of around pounds 500m in the full-year.
- 5 How the language you speak changes your view of the world
Lucy Hawking: Stephen Hawking's daughter writes impassioned open letter to Katie Hopkins about rights of disabled people
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
How the language you speak changes your view of the world
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...