by Fiona Walsh
Bid target Scottish Power came out fighting today as it delivered first-half profits way ahead of City forecasts and said it was confident of continued growth.
As Spanish bidder Iberdrola prepares to launch a £12bn offer, Britain's fifth-largest energy supplier said its pre-tax profits had surged 77% to £483m in the six months to September 30. Most analysts had been expecting a figure around £420m.
Operating profits for the six months to September 30 jumped by 59% to £517m, while profits from continuing operations were ahead by 39% to £330m.
The chief executive, Philip Bowman, later made no specific reference to the group's Spanish suitor but, in what was seen by analysts as an attempt to talk the price up, he said: "Perhaps there will be some degree of upgrading of full-year forecasts and that obviously will have a knock-on impact in terms of valuations."
However, despite the forecast-busting figures, shares in the group fell 6.5p to 737p, well below the rumoured bid terms of 800p. That reflects a widelyheld view that the shares are over-priced, despite Scottish Power's takeover attractions.
The shares briefly hit a record high of 798p when Iberdrola was revealed as a suitor last week.
Restructuring programme
"These are excellent results," said Mr Bowman. "They demonstrate the transformation of the group and the benefits of the actions we have taken to enhance operational performance and generate attractive returns from our investment programme."
He said there had been strong performances across all business areas, particularly from the non-regulated energy businesses in the UK and US.
The group's restructuring programme delivered £20m of savings in the first half, bringing the total to date to £30m and leaving the group on course for savings of £60m by 2008.
He added: "We set out this year to continue the rapid and effective implementation of our strategy to enhance the performance of all our operations.
"We have sought to become leaner and more responsive - to speed up decision-making and to push accountability out into the business. This will enable us to be more competitive and to respond more quickly to our customers and changing market conditions."
Scottish Power serves 5.2 million energy customers in the UK and is one of the leading windfarm operators in the UK and the US. It has been tipped as a takeover target for some time and a year ago rejected a 570p a share bid from the German E.ON energy group.
Iberdrola, Spain's second-largest energy firm, emerged as a potential suitor last week and is believed to be preparing a bid worth 800p a share.
Concern has been expressed by some of Scottish Power's large energy users that a bid could damage competition as ownership of Britain's energy firms becomes more concentrated in foreign hands.
Source: The Guardian
Bid target Scottish Power came out fighting today as it delivered first-half profits way ahead of City forecasts and said it was confident of continued growth.
As Spanish bidder Iberdrola prepares to launch a £12bn offer, Britain's fifth-largest energy supplier said its pre-tax profits had surged 77% to £483m in the six months to September 30. Most analysts had been expecting a figure around £420m.
Operating profits for the six months to September 30 jumped by 59% to £517m, while profits from continuing operations were ahead by 39% to £330m.
The chief executive, Philip Bowman, later made no specific reference to the group's Spanish suitor but, in what was seen by analysts as an attempt to talk the price up, he said: "Perhaps there will be some degree of upgrading of full-year forecasts and that obviously will have a knock-on impact in terms of valuations."
However, despite the forecast-busting figures, shares in the group fell 6.5p to 737p, well below the rumoured bid terms of 800p. That reflects a widelyheld view that the shares are over-priced, despite Scottish Power's takeover attractions.
The shares briefly hit a record high of 798p when Iberdrola was revealed as a suitor last week.
Restructuring programme
"These are excellent results," said Mr Bowman. "They demonstrate the transformation of the group and the benefits of the actions we have taken to enhance operational performance and generate attractive returns from our investment programme."
He said there had been strong performances across all business areas, particularly from the non-regulated energy businesses in the UK and US.
The group's restructuring programme delivered £20m of savings in the first half, bringing the total to date to £30m and leaving the group on course for savings of £60m by 2008.
He added: "We set out this year to continue the rapid and effective implementation of our strategy to enhance the performance of all our operations.
"We have sought to become leaner and more responsive - to speed up decision-making and to push accountability out into the business. This will enable us to be more competitive and to respond more quickly to our customers and changing market conditions."
Scottish Power serves 5.2 million energy customers in the UK and is one of the leading windfarm operators in the UK and the US. It has been tipped as a takeover target for some time and a year ago rejected a 570p a share bid from the German E.ON energy group.
Iberdrola, Spain's second-largest energy firm, emerged as a potential suitor last week and is believed to be preparing a bid worth 800p a share.
Concern has been expressed by some of Scottish Power's large energy users that a bid could damage competition as ownership of Britain's energy firms becomes more concentrated in foreign hands.
Source: The Guardian
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