BG on track to make pounds 1.5bn payout
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BG, THE gas transportation and exploration group, yesterday held out the prospect of a pounds 1.5bn payout to its 1.2 million shareholders after disclosing that it is beating the financial targets set down by the industry regulator, Ofgas.
The group, which demerged from Centrica, the trading arm of British Gas, in February last year, also said it expected to raise a further pounds 450m from asset disposals this year, bringing the total to pounds 1.65bn.
The payout would follow a pounds 1.2bn distribution to shareholders last year through a special issue of `B' shares. David Varney, BG's chief executive, said the company was now exploring the best route for returning capital to shareholders and said it would be comfortable with a payout of between pounds 1bn and pounds 1.5bn.
This would give it a debt-to-equity ratio of about 50 per cent in its regulated business, Transco, which runs the country's gas pipeline and storage network. Mr Varney also disclosed that BG was beating the rate of return set down in its latest price control formula by between pounds 80m and pounds 100m a year.
When the gas regulator, Clare Spottiswoode, announced the new price controls, British Gas described them as the "biggest smash-and-grab raid ever" and warned they could mean 10,000 job losses and undermine the safety of the gas distribution system.
However, Mr Varney said the company was achieving a rate of return of 8 per cent against the 7 per cent implied in the regulator's formula, with a reduction in the headcount of 2,500.
He was speaking as BG reported second-quarter earnings at the bottom end of analysts' forecasts and lifted the interim dividend by 7.5 per cent to 4.3p. Pre-tax profits fell 24 per cent to pounds 187m due to lower transportation charges, higher interest payments and increased severance costs.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments