Newswatch – Scottish Power under pressure

ScottishPower finance director Ian Russell will be fending off questions about the effect of ever-tightening regulation on the utility giant’s income as he unveils its preliminary annual results next Thursday (6 May).

As Scotland celebrates its new parliament’s first-ever election, analysts will be looking for reassurance that ScottishPower can protect its revenues in the face of efforts by water, gas and electricity regulators to reduce prices for consumers.

Nevertheless, most are predicting the multi-utility company will be delivering profits of around #645m for the period to 31 March 1999. Last year’s pre-tax profits were #588m.

Analysts will also be looking for an update on the progress of ScottishPower’s impending union with US power provider PacifiCorp. Although both parties are keen to portray it as a merger, ScottishPower has confirmed it would be accounted for as an acquisition by ScottishPower, whose shareholders are expected to end up with 64% of shares in the combined operation.

ScottishPower’s management will also dominate the board and the company will retain both its Glasgow headquarters and its primary listing in London. Russell is to remain in his position as deputy chief executive and finance director.

The deal received a boost earlier this month when competition and consumer affairs minister Kim Howells decided not to refer it to competition regulators.

US regulators have yet to approve it, however.

ScottishPower is planning a #500m share buy-back once the deal is completed.

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