EME increases payout despite profits plunge (CORRECTED)

CORRECTION (PUBLISHED 22 JUNE 1994) APPENDED TO THIS ARTICLE

EAST Midlands Electricity, the power distributor chaired by Nigel Rudd, has increased its dividend by 16 per cent to 22.7p, on a 66 per cent fall in pre-tax profits to pounds 66m, writes Robert Cole.

Last month the company said pounds 130m of reorganisation costs would affect profits for the year to 31 March and in future it would concentrate on electricity supply and distribution.

Most of the costs came from the closure of Emco, East Midlands' contracting business, where it spent pounds 80m on redundancies and losses.

East Midlands paid pounds 29m to dispose of Ambassador, a security company, and pounds 20m on divestment of the retail business that was injected into a 50:50 joint venture with Yorkshire Electricity.

The company has to use reserves to pay the increased dividend because of the exceptional items.

Analysts were disappointed the company was not divorced from non-performing peripheral businesses as losses in the retail joint venture were pounds 2.9m.

Profits from continuing businesses rose 12.7 per cent to pounds 182.8m against pounds 162.1m, and turnover dropped with margins up from 10.3 to 12.6 per cent. Earnings per share fell from 53.3p to 12.7p but rose before exceptional items to 63.7p from 59.2p. EME dipped 9p to 568p.

CORRECTION

East Midlands Electricity's pre-tax profits fell from pounds 155m to pounds 51.2m last year, not as stated in yesterday's edition.