Hyder holds back dividend

The Welsh multi-utility Hyder has reported a sharp drop in profits and announced that it will not pay a final dividend.

Pre-tax profits at Hyder dropped to £76.7m after exceptional costs, down from £206m from a year earlier.

This takes into account the massive costs of restructuring the company. Without these, the company would have made a £158m profit.

The heavily indebted company is currently the object of a take-over battle. Japanese investment bank Nomura is bidding £402m, while US-owned English utility Western Power Distribution is offering £460m.

Hyder provides water, waste water treatment and electricity to millions of customers in Wales, and is the region's largest employer.

'A challenging year'

Hyder says it would have paid a 13.3p dividend, but would not do so "in view of the present offers for the company". In 1999 Hyder had paid a 33.6p dividend.

The utility promised shareholders an 'interim dividend' if none of the take-over bids succeeds.

Hyder's chief executive, Graham Hawker, called it "a challenging year for Hyder", but insisted that its businesses had "continued to perform well".

The company has more than £1.5bn of debt, and has been hit by rulings from industry regulators that cut deep into profits.

The average water bill has dropped by £30, while electricity bills are down by about £13.

This is good news for consumers, but has created a substantial hole in Hyder's balance sheet - and pushed down the company's share price.

Two-and-a-half years ago, Hyder shares traded at just under 1,050 pence. They are now down to about 315p, after hitting a low of 182p in March.