Wednesday, November 3, 1999 Published at 11:38 GMT
Business: The Company File
Scottish Power profits down
Chief Executive Ian Robinson: "Can't believe price-capping is necessary"
Scottish Power has just announced its results for the past six months, showing that pre-tax profits have slipped by 25% to £185m.
It also owns Manweb and Southern Water, and is awaiting key decisions by industry regulators on proposed price cuts.
Ofgem director-general Callum McCarthy last month proposed initial cuts of 6% on its energy distribution and 13% on its transmission business in Scotland in a bid to bring down household bills.
Scottish Power - which also faces a host of other regulatory proposals for both electricity and water businesses in Scotland and England - has strongly criticised the proposals, saying they would damage customer service, investment and returns for shareholders.
The chairman, Murray Stuart, said: "The UK utility market is becoming increasingly competitive and we are concerned that the Ofgem and Ofwat regulatory reviews, if implemented in their current forms, would have serious implications."
The company is "vigorously" pressing regulators to rethink their positions.
The chief executive, Ian Robinson, said: "We just can't believe that one needs such price-capping when competition is already working."
He declined to put a figure on how much the proposals would cost the company saying it was too early on in the negotiations.
As well as floating Thus, Scottish Power is also merging the rest of its operations with the American utility firm Pacificorp it has acquired.
Scottish Power has had to negotiate with six states and at a federal level to gain approval for the deal.
Mr Robinson would not be drawn on an expected figure for savings from the deal but said there would be a number of increases in bills for PacifiCorp's customers.
Scottish Power's pre-tax profits in the six months to 30 September came in at £184.8m against £247.3m last year.
The figure includes a £55m charge for excceptional costs related to the flotation of Thus and new investment.
Turnover was £1.5bn against £1.4bn. The company supplies two million homes with water and a further 3.5 million with electricity.
Shareholders will pick up an interim dividend of 8.27 pence, up on the 7.5p half-year payment last year.
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