ScotPower plugs into customer gains
CUSTOMER gains of around 20,000 a month at Scottish Power, many from lower-income households, helped lift pre-tax profits before exceptionals and goodwill amortisation in its third quarter to last December to £251.8m against £239.7m last time. The figures were ahead of market expectations and Scottish Power shares added 5 1/4p to 337 1/2p.
With many institutional shareholders looking at the utility for yield, the third-quarter dividend of 7.177p, up from 6.835p a year ago, also pleased the market. Total dividends for the nine months to December were 21.531p up 5%.
The $300m cost-saving programme initiated by chief executive Ian Russell at its troubled US division, Pacificorp, is now two thirds of the way through, with some £20m of cost savings delivered in the quarter.
Sales of utilities such as Southern Water helped reduce debt to £4.3bn, down £1.8bn, with gearing down to 94% against 131%.
Russell is aware of the possible attractions of a marriage with Scottish & Southern Energy but said he intends to concentrate on the recovery at Scottish Power. With the White Paper on Britain's energy needs due out later this month, Russell's evidence to MPs concentrated on the need for coal to continue to be used in generating power and for the UK's ageing power lines to be placed on a renewal programme. Currently the creaking system is 'renewed every 100 years', said Russell. He is also planning to increase the amount of electricity generated by windpower in Britain to 500 megawatts a year from the present 100 megawatts within three years.
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