British Energy profits up 56%

28 May 1999

British Energy (BE), the UK’s privatised nuclear generator, has announced pre-tax profits of £298 million for the year to 31 March, up 56% on last year. Output was up 2.4 TWh to 69.1 TWh. The board has also announced its intention to return £432 million, equivalent to £0.60 (about $1) per share, to shareholders later this year.

The one off payment to shareholders reflects the company’s difficulties in expanding its business portfolio beyond its joint venture company AmerGen’s purchase of Three Mile Island 1, Vermont Yankee and Clinton NPPs in the United States. BE has been thwarted in its ambition to grow its business beyond nuclear generation. The UK government prevented the company from buying a coal-fired power station arguing that at 21%, it had a large enough share of the UK generation market already. It was also outbid by Electricité de France for distributors London Electricity.

Despite setbacks, BE is optimistic of widening its business base in the future.

“We have shown through AmerGen that our success in improving nuclear power plants can give us opportunities to enter into new markets,” said chairman John Robb in the annual statement. “In addition to the AmerGen programme, we are looking more broadly at the North American energy sector. Elsewhere, we will continue to monitor the opening up of European electricity markets and will target selected markets which we believe offer potential for major partnerships or acquisitions.” • The UK government is considering selling a 49% share in British Nuclear Fuels. Trade Secretary Stephen Byers is thought to have approved the sale after receiving a report on BNFL from the accountancy firm KPMG, but the Department of Trade and Industry refuses to confirm or deny this, saying an announcement will be made after the European Elections on 10 June.

The partial sell-off, described as a “public-private partnership”, would net the government around £1 billion.

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