Bottom Line: Powerful potential

ACCORDING to Brian Birkenhead, finance director of National Power, the scope for dividend increases over the next few years is 'indeed quite attractive'. Indeed it is.

The total increase last year of 18 per cent, after a miserly 13 per cent interim uplift, was certainly above expectations and the company plans to reduce cover from three to 2.5 times over the next two years, implying growth of 16 per cent a year.

Unlike the regional electricity companies the company faces no obvious immediate regulatory threat, and the new largesse on dividends is timely ahead of the likely sale next February of the Government's remaining 40 per cent stake. Given the dividend paying power, a yield of 4 per cent looks attractive.