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[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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CWN / Business / A-Z / PowerGen / 6 Sep 00

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