Profit surge for Scottish Power
November 14, 2006
Scottish Power, the energy firm which is currently a potential bid target for Spanish firm Iberdrola, has reported a 77% jump in its half-year profits.
The group, which has 5.2 million energy customers, made profits of £483m in the six months to 30 September.
A rise in wholesale prices and strong performance at its coal-fired power plants were behind the gains, it said.
It made no reference to its talks with Iberdrola, but the strong results may strengthen its hand in striking a deal.
Customer growth 'constrained'
In June, the utility firm raised gas bills by an average of 17% while electricity prices rose by 10%.
However, Scottish Power said that rising commodity and environmental compliance costs meant returns on its retail business remained poor.
"As a result, we have deliberately constrained customer growth and our customer numbers have been held broadly stable during the period," it said.
On Friday, Iberdrola confirmed it was in negotiations with Scottish Power over a possible deal.
Reports have suggested that Iberdrola - a specialist in wind power - may put forward a bid of more than 800 pence a share, or about £12bn.
Last year, Scottish Power rejected a bid approach of 570p a share from German utility E.ON.
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