[06
SEP 00] POWERGEN NEWS
Sparks Goes Out Of PowerGen Profits
Coventry-based
utility supplier PowerGen has seen its profits drain following stiff
competition.
The
electricity business has brought in less revenue than expected,
causing pre-tax profits for the half-year to fall from £289 million
to £241 million.
Lower
returns from the electricity wholesale, trading and distribution
divisions are the main reason for the fall.
Lower
electricity prices introduced early this year will have a similar
effect for the rest of the year, the company has predicted.
PowerGen
has a lower voltage presence in the increasingly competitive
electricity business since it sold two power stations last year.
But
the group says turnover has increased to £2.05 billion from £1.9
billion as its retail business, which supplies gas, electricity and
telecoms and its international division are booming.
A
£2 billion takeover of US electricity and gas group LG&E is still
being processed, and PowerGen hopes to have a foothold in the US
market by the end of the year.
Powergen's
chairman Ed Wallis said:
"The
result of this strategic activity will be a business focused on the
UK and US providing a lower risk, higher quality and more
diversified earnings base with a reduced dependency on profits from
UK generation. "
Shareholders
will be paid an interim dividend of 10.8p - the same as last year.
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