Power firms increase dividends

COST-CUTTING and lower interest charges helped Midlands Electricity and South Western Electricity to raise their interim dividends by 12.4 per cent to 6.35p and 5.9p respectively.

Despite the continued economic downturn, the companies reported a fall in the seasonal loss in the supply side of the core electricity business and said the outlook for the full year was promising.

Midlands reported a 23.7 per cent increase in interim pre-tax profits to pounds 33.4m from pounds 27m a year earlier on turnover up by 7.1 per cent to pounds 660.7m. Bryan Townsend, chairman and chief executive, said that non-core businesses including retailing, electrical contracting and gas supply were all profitable.

The company has shed about 200 jobs so far this year and will cut another 150 by the year-end. Mr Townsend said Midlands was about to announce the first of a series of ambitious projects to generate electricity from waste.

South Western Electricity reported a 17 per cent increase in interim pre-tax profits to pounds 15.9m from pounds 13.6m in the first half of last year. Turnover improved to pounds 381.4m from pounds 362.5 a year ago. The retail arm made an operating loss of pounds 2.6m in the first half of the year but the company said that the contracting business remained in the black in spite of tough market conditions.