Bottom Line: Scottish revival
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.SCOTTISH POWER and Hydro- electric have been among the worst share price performers in the electricity sector this year, underperforming the stock market by 15 per cent in the past three months.
The Scottish electricity companies began the year with high valuations brought about by overconfidence among investors over their relatively less exposed position to draconian price regulation in distribution activities. This view gradually lost its force.
Yesterday Scottish Power - whose shares jumped 11p to 378p, provoking a sympathetic rise in Hydro-electric - revived the argument for the Scots.
It was not so much because of Scottish Power's dividend increase, which at 11 per cent will look pedestrian in comparison with the rises due to be announced by the English generators and the regional electricity companies.
The company, which now has a shrewd suspicion just how tough Offer will be on distribution - about 45 per cent of Scottish Power's profits against 95 per cent on average among the regional companies - was able to project real dividend increases of 5 or 6 per cent for the foreseeable future.
With advance VAT payments eliminating gearing and huge surplus cash flows, Scottish Power's balance sheet is strong and its moves into unregulated territory are, unlike East Midlands, looking robust so far.
Cheap Miller Gas and future retrofits of coal-fired stations should be helping margins, and exports from Scotland could add 10 per cent to earnings in a few years.
A 4.5 per cent prospective yield in that respect offers attractions over the higher-yielding regional companies and lower-yielding English generators.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments