Southern Electric cuts

SOUTHERN Electric is to cut almost 1,100 jobs in its core electricity business by the end of 1995, speeding up redundancy plans. The company, which yesterday announced a 20 per cent increase in the interim dividend to 6.7p, said that it must continue to drive the business hard on costs.

An improved performance by Southern's pipe and cables contracting subsidiary, MP Burke, and Thermal Transfer, its environmental company, helped to increase pre- tax profits by 16 per cent to pounds 89.2m in the first half of the year. Henry Casley, the group's chief executive, said that the other main factors behind the profit rise were lower manpower costs and more favourable interest rates.

The amount of electricity distributed rose slightly, in spite of difficult economic conditions and a fall in demand from industrial customers. Mr Casley said that new house connections were beginning to show an increase for the first time in four years but that any upturn would be gradual.

E&S Retail, Southern's retailing venture with the Eastern and Midlands electricity companies, made a loss in the first six months. Mr Casley said customer spending was still at a very low ebb and that the business was unlikely to make a profit in the full year. Southern's joint venture in gas supply with Philips also made an interim loss but is expected to report a small profit by the year end.

Southern Electric is also involved in three power stations that are expected to be completed by early 1995. They include a combined heat and power plant, in which Courtaulds is the other partner, and the Barking and Medway combined-cycle gas turbines.

The group hopes that 15 per cent of earnings willl come from its non-regulated businesses by the end of the decade and believes it is on target to achieve that. Further opportunities may include ventures in telecommunications, which would involve links with Energis, the telephone subsidiary of the National Grid Company.

During the year Southern has announced price cuts totalling pounds 46m - around pounds 18 on an average household bill of pounds 350. All the electricity supply companies have been cutting or freezing prices to reflect cheaper fuel supplies and lower-than-expected inflation.