North West lifts dividend by 11%

FOOTBALL

BY MAGNUS GRIMOND

North West Water led off the water companies' reporting season yesterday with news of a near-11 per cent uplift in dividends for the year to March.

A final payment increased from 15.4p to 17.2p, taking the year's total to 25.55p, slightly ahead of expectations.

The payment will be made in October alongside the first of a series of special dividends, worth 3.8p a share, announced last month as part of North West's plans to share pounds 400m cost savings on its massive capital investment programme with investors and customers.

North West's shares added 5p to 583p yesterday, dragging a few others in the sector up in their wake. One analyst said he would be looking for a further 12 per cent rise in the dividend to 28.55p this year.

The dividend news was one of the only surprises in results which came in largely in line with expectations. Pre-tax profits rose 5.6 per cent to pounds 284m on turnover which broke through the pounds 1bn barrier for the first time, advancing from pounds 924m to pounds 1.01bn.

Sir Desmond Pitcher, chairman, said the year had been characterised by efforts to prepare the group to deliver strong earnings growth.

Clearing up after some disappointing diversification has clearly been the focus of these moves. The latest figures included a pounds 13.5m write-down on North's construction activities, following the decision of Brian Staples, the new chief executive, to exit the business. Delays and cost overruns on a project inThailand have also led to a provision which analysts believe could be between pounds 5m and pounds 8m. Future overseas expansion will in future be pursued in association with Bechtel, the Continental construction group.