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Seeboard rebates under fire

Mary Fagan
Friday 23 June 1995 23:02 BST
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East Midlands Electricity yesterday attacked moves by Seeboard to give customers an annual rebate ahead of new price controls to be announced next month by the regulator, Offer, writes Mary Fagan.

Robert Davies, finance director, said the payback of about pounds 8 a year was "not a logical response from a regulated monopoly and not the right strategy for shareholders".

"It fails to recognise or give credence to the enormous value realised by customers since privatisation," Mr Davies said as East Midlands announced pre-tax profits of pounds 214m for the year to March compared with pounds 51.2m previously, when the company had pounds 129m in restructuring costs.

Underlying earnings per share rose 22.9 per cent to 78.3p and the dividend increased 27.8 per cent to 29p. This was in addition to an 85p-a-share special payout announced in September.

The company reduced the workforce by 1,700 during the year as a result of increased efficiency and the disposal of non-core operations including retail. Of the total job losses, about 450 were in the main electricity business, which is expected to have further cuts in coming years.

Mr Davies said: "Our major thrust is to add value to the core business and a key part of that is to continue to get costs down."

The company was committed to returning value to shareholders, but nothing would be decided until after the price review, he said.

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