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South Wales power surge

Mary Fagan,Industrial Correspondent
Thursday 16 June 1994 18:02 EDT
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South Wales Electricity's results were at the top end of expectations, with pre-tax profits up by almost 20 per cent from pounds 87m to pounds 104m last year. First-time income from an investment in the Teesside power generation project and the dividend from the National Grid Company, which rose by pounds 1.1m to pounds 10.2m, contributed.

Wynford Evans, chairman, said he welcomed the current review of the future of the NGC, which is owned by the 12 regional electricity companies in England and Wales. They have appointed Kleinwort Benson, the merchant bank, to advise on floating the grid company on the stock market, which could raise more than pounds 4bn.

Turnover rose from pounds 586m to pounds 605.4m, while earnings per share rose 22.7 per cent to 73.6p. The dividend is up 14.8 per cent to 25.6p, with dividend cover increased from 2.7 times to 2.9 times.

Mr Evans said the progressive dividend policy would continue, whatever the outcome of the review of price controls by Offer, the industry regulator, due this summer. He said the results bore out the consistent approach taken since privatisation - cutting costs and increasing productivity in the main electricity business while finding partners for diversification into new areas.

Last year Swalec formed a cable television and telephony joint venture with CableTel of the US. It said its long-term revenues would far outstrip the pounds 30m investment planned by Swalec. Celtic, the contracting arm, made a loss of pounds 2.2m last time so senior management changes have been made.

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