SCOTTISHPOWER is still interested in acquiring an
American electricity generator despite walking away from a mooted #3000m purchase of Florida Progress.
Chief executive Ian Robinson said the decision was taken after it became clear that shareholder value was not to be found there but the multi-utility is looking at other US generating companies.
However, the City is convinced that the US is the main target for a company which would rank fifth or sixth by capitalisation in that country.
ScottishPower yesterday revealed full-year figures bang in line with market expectations. Pre-tax profits rose 15% to #640m with earnings per share 8% ahead at 41.p before the #317m windfall tax.
The dividend total has been raised 10% to 20.4p with a final of 13.6p. In the markets the shares eased 1.75p to 564p.
The results included a first full- year contribution from Southern Water of #241m. That is proving a highly successful investment with costs reduced by #28m and underlying profits up 21%.
The subsidiary has a particularly good relationship with Ofwat - it has the lowest leakage rates within the regulator's jurisdiction at 12.4%.
The Manweb electricity distribution business saw profits static at #131m while a reduction in regulated prices was balanced by a
further drop in costs.
The core generating operations saw a profits decline due in part to warmer weather and increased levels of ''must take'' nuclear
supplies although distribution and transmission surpluses were ahead.
However, there was a slight increase in the losses on the second tier or unregulated electricity business and the company is pulling back from unprofitable business.
The Department of Trade and Industry approval of the Yorkshire interconnector will lead to a 50% increase in exports to England by both ScottishPower and
Hydro-Electric on completion in 2000 and sales will be boosted when the link with Northern
Ireland is completed in 2001.
In addition to the three million annual tonnes of coal contracts with Scottish suppliers, the gas requirements will be supported by the #15m development of the
Hatfields Moors gas reservoir in Yorkshire which has a capacity of 4100 million cubic feet.
A #200m 400mw combined-cycle gas turbine generator will be built at Shoreham Harbour in
Sussex in a joint venture with the Central & South West parent of Seeboard for completion in 2000.
The main thrust of expansion is, however, in the gas and telecoms businesses.
The company has attracted 320,000 gas customers as part of its target of winning 12% of the ''profitable'' share of regional domestic markets by 2000
compared with the 8% at present.
However, the cost of winning a new customer is #35 compared with the average profit per account of #30.
But by the year after next and if everything goes to plan, the group should have about one million customers and a profit of #30m assuming the current levels of return are maintained.
Telecoms have become ever more high profile - the activity brought in profits of #4m. The group already had 6% of the
Scottish corporate market before the acquisition for #66m of the Demon Internet service provider.
That brings in another 1000 corporate customers and finance director Ian Russell said that that will generate profit of about #20m.
The telecoms business, which also includes the Martin Dawes operations in Scotland and the
Pinnacle Cellular dealer in
Vodafone, has resulted in a customer base in mobile phones of 60,000.
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