Hyder shuns windfall tax protesters
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Your support makes all the difference.Hyder, the Welsh water and electricity supplier, yesterday ruled out participating in a concerted campaign among the privatised utilities to thwart Labour's proposed windfall tax.
The campaign is being co-ordinated by Sir Colin Marshall, president of the CBI and chairman of British Airways, and is supported by Michael Heseltine, the Deputy Prime Minister.
Iain Evans, chairman of Hyder said: "It smacks of a politically inspired initiative. I don't see any particular benefit in having the Tory Party complaining on our behalf."
He said, however, that he would certainly favour giving a rebate to customers if it was a choice between that and paying Labour's windfall levy.
Mr Evans was speaking as Hyder said it was accelerating the cost-cutting programme it embarked on following the acquisition of Swalec at the beginning of this year.
The combined group expects the planned pounds 45m savings from the merger to be achieved earlier than the target date of March 1999 following the rapid progress made so far this year.
Hyder had planned to achieve pounds 8m in cost savings in the first year by cutting corporate overheads and merging the service divisions of Welsh Water and Swalec. But at the halfway stage it had saved pounds 5m prompting it to accelerate the programme.
The merger will result in 500 job losses. Of those 275 have so far been implemented through natural wastage and voluntary severance.
Together with 400 job cuts being implemented separately at Welsh Water it will bring total savings across the group to pounds 100m a year. Hyder took a one-off charge of pounds 55m in last year's accounts to cover the cost of the restructuring programme.
Mr Evans also disclosed that it is scrapping a computer billing system, Creseo, which Swalec and South Western Electricity have spent pounds 60m developing, and selling off non-core investments in property, power generation and cable.
He was speaking as Hyder reported a 25 per cent increase in pre-tax profits for the six months to the end of September. Swalec produced a profit before interest of pounds 41.7m while Welsh Water's profit before interest fell marginally to pounds 84.1m following the pounds 9-a-head customer rebate which took effect this year.
The group's unregulated businesses made a profit of pounds 13.1m, with Hyder Services contributing pounds 8.6m of that. Mr Evans said Hyder Services intended to improve the quality and cost-effectiveness of its service to existing customers before seeking outside facilities management contracts
Meanwhile, profits in Hyder's infrastructure division grew from pounds 600,000 a year ago to pounds 3.3m.
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