Tuesday, June 2, 1998 Published at 09:37 GMT 10:37 UK
Business: The Company File
National Grid profit fall sparks overseas move
National Grid received an electric shock from industry regulator Offer
Underlying final profits at National Grid, which runs Britain's electricity transmission system, fell 21% to £468m due to price cuts ordered by Offer, the industry regulator.
National Grid is now turning its attention to overseas markets and is eyeing up a 'significant' acquisition in the US. It is also looking at a new joint venture in India with an Australian distribution firm.
David Jones, chief executive of National Grid, said: "We are actively looking at the USA. What we would be looking for..(is).. a significant transaction." The group said it was willing to pay more than £1bn on a new purchase.
National Grid made a one-off profit of £107m from the successful flotation of Energis, the telecommunications system that uses its network.
National Grid has seen the value of its remaining 74% stake in Energis rocket from £600m to around £1.9bn since it was floated last year. Mr Jones said that the group had no intention of selling down its stake in the group. Sales at Energis rose 73% to £168m as the group extended its network into metropolitan areas after teaming up with Deutsche Telekom and France Telecom.
The group is looking for a successor for 64 year old Mr Jefferies, one of the few executives that have survived from the pre-privatisation era.
Mr Jefferies said that National Grid was on target to produce an ongoing 6% reduction in annual controllable costs in real terms.
The group has raised its dividend 8.4% to 12.07p on top of the £770m, 44.7p a share special dividend it announced last year.
National Grid's profits topped analysts expectations and the shares had risen 12p to 384p by 10.35 BST (9.35 GMT).
The Company File Contents