National Power PLC Preliminary Results for the Year Ended March 31, 1999.LONDON--(BUSINESS WIRE)--May 26, 1999-- KEY POINTS - A difficult year's trading. - UK repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. well advanced - increased output from existing plant. - Solid international performance apart from difficulties at Hub and Kot Addu Kot Addu is a city in the Punjab province of Pakistan. Kot Addu lies in the tehsil of Muzaffargarh. It is located in the southern part of the province, and is a very historic city. . - Strong development of international business - seven new deals secured. - Recommended final dividend of 19p per share. - Substantial reduction in dividend for 1999/00.
Year to Year to
31 March 31 March
1999 1998
(restated)
Summary results (pound)m (pound)m
Group profit before tax and
prior year exceptional items 571 728
Tax on ordinary activities (99) (138)
Minority interests 1 -
-------- -------
Profit after tax and minority
interests but before prior year
exceptional items 473 590
Profit for the financial year 473 335
======== =======
Earnings per share before prior
year exceptional items 38.3p 48.5p
Dividend per share 28.6p 27.0p
Gearing ratio, excluding
non-recourse debt 52% 50%
John Collins, Chairman: "In an eventful e·vent·ful adj. 1. Full of events: an eventful week. 2. Important; momentous: an eventful decision. period that saw, as expected, lower Group earnings, National Power nevertheless continued to make progress in its strategy to be a leading global power company. In the UK, we are repositioning our operations into an integrated energy business. Committed international capacity doubled during the year, the biggest annual increase in our international portfolio. International earnings, however, were below plan, principally due to Pakistan Pakistan (păk`ĭstăn', päkĭstän`), officially Islamic Republic of Pakistan, republic (2005 est. pop. 162,420,000), 310,403 sq mi (803,944 sq km), S Asia. . The growth and scale of our overseas operations was reflected in the decision to re-organize the Group into UK and international businesses with their own managing directors. "Following the resignation of Keith Keith may refer to: People with the given name Keith:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. with responsibility for the day to day management of the Group. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Count, formerly Operations Director, has been appointed Managing Director, UK, and Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Raznahan continues as Managing Director, International. Roger Witcomb continues as Finance Director. "Under my Chairmanship, the Board is conducting a full review of strategy. We are approaching this with an open mind, and are determined to deliver shareholder value. "The Board is recommending a final dividend of 19p per share, making a full year dividend of 28.6p per share for the year ended 31 March 1999. "The sale of Drax Drax could refer to:
Result of a transaction that decreases earnings per common share (EPS). on profits, and intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition in UK generation is expected materially to reduce underlying operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from UK generation in the year to March 2000. At the same time, prospects for profitable international investment remain good. Against this backcloth, the Board believes that a substantial reduction in dividends will be appropriate and will announce its revised dividend policy following the strategy review and completion of the Drax sale. "Having regard both to the desire to maintain an efficient capital structure and the investment requirements of the international business, the Board will decide, following the completion of the strategy review and the sale of Drax, whether or not there will be scope for a return of capital to shareholders. Graham Brown, Chief Operating Officer: "National Power's UK power stations produced a strong operating performance during the year. In particular, they achieved high availability Also called "RAS" (reliability, availability, serviceability) or "fault resilient," it refers to a multiprocessing system that can quickly recover from a failure. There may be a minute or two of downtime while one system switches over to another, but processing will continue. , and maintained market share. The increased output, together with the decision to contract their output early, and substantial efficiency and cost savings, helped reduce the one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. effect on earnings of the ending of the coal-backed electricity sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. . "Our acquisitions of two supply businesses and our own sales arm give us a 2.7 million customer retail business able to compete in developing UK energy markets. The planned sale later this year of the 4,000MW Drax plant will meet the Government's requirement for the divestment divestment to strip one's investment from an entity. of modern coal-fired Adj. 1. coal-fired - fueled by burning coal; "a coal-fired ship" coal-burning fueled - heated, driven, or produced by burning fuel capacity to increase competition. These transactions will transform our UK organization into a broadly based energy business with better matched generation and retail operations. "Operational performance of our international assets was good. However, overall international earnings were down as a result of our decision to make a provision in respect of money owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de us in relation to our Pakistan assets. We are continuing to work hard with the assistance of the World Bank and IMF IMF See: International Monetary Fund IMF See International Monetary Fund (IMF). to resolve matters and to achieve a satisfactory outcome. "We secured seven new deals in 1998/99, taking our committed international investments to (pound)2.3 billion, of which around 80% are in developed markets. That growth is continuing. Total capital expenditure on investments overseas in 1999/2000 is expected to exceed (pound)600 million. "With regard to the current year, increasing competition from new entrants in the UK will further reduce volumes available to coal-fired generators and a continuing decline in electricity prices is likely. However, by maximizing the efficiency of our portfolio of base load, mid-merit and peaking plant, we will be able to compete effectively in the market. New overseas investments are set to contribute to significant growth in international earnings. This, together with ongoing cost-cutting and other measures across the company, are expected to offset the decline in UK generation operating profits in 1999/2000, before the impact of the disposal of Drax." BUSINESS REVIEW UK Generation As expected, UK operating profits fell, by (pound)76 million, although plant availability and performance during the year were good. Sales of electricity through the Pool of 62.5 TWh were around 2 TWh higher than in 1997/98 due to higher Pool demand and lower competitor output in the first half of the year. These factors enabled the company to maintain its market share at 21% for the year, within an overall market up by 2%, notwithstanding the commissioning of a further significant amount of new capacity by competitors. During the year the Didcot B (1,370MW) CCGT CCGT Combined Cycle Gas Turbine CCGT Chicago Center for Green Technology CCGT Combined-Cycle Generating Technology CCGT catalytic combustion gas turbine plant was fully commissioned and performed well over the winter period. The FGD FGD Fire & Gas Detection FGD Flue Gas Desulfurization FGD Focus Group Discussion FGD Feature Group D FGD Forged FGD Familial Glucocorticoid Deficiency plant at Drax power station Drax is a large coal-fired power station located near Selby in North Yorkshire in Northern England. , which had been removed from service because of structural faults early in 1998, was fully returned to service following a successful repair programme. We closed Pembroke Pembroke, town, Canada Pembroke (pĕm`brōk), town (1991 pop. 13,997), SE Ont., Canada, NW of Ottawa, on the Ottawa River. It is a lumbering center and also has steel and electric-products factories. oil-fired adj. 1. Using oil as a fuel; as, an oil-fired furnace s>. Adj. 1. oil-fired - fueled by burning oil; "an oil-fired furnace" fueled - heated, driven, or produced by burning fuel oil-fired power station and the remaining (188MW) operational unit at Willington Willington is the name of several places in England:
n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. on the system. The sale of Drax power station, which is subject to shareholder approval, is expected to be completed in the autumn of 1999. Following the sale, our UK generating portfolio will include a mix of highly efficient gas-fired gas-fired adj → de gas gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- plant, coal and oil stations capable of providing electricity for base load, mid-merit and peak demands. Our continuing emphasis on low-cost production and efficient working practices should enable us to maximise the future contribution of this flexible portfolio of generation plant. Shortly after the year end, we signed a new agreement with RJB RJB Radio Jura Bernois SA (Switzerland) Mining PLC for the supply of up to 46 million tonnes of coal over a five year period, including options for but no firm commitments to purchases beyond 2001. This includes our existing three-year agreement to purchase 18 million tonnes, which began in April 1998. The arrangements provide the company with flexible and secure coal supplies, while insulating us from risks associated with imports. Construction work is underway on our 1,500MW CCGT at Staythorpe, which will in due course increase our UK CCGT portfolio to around 4,700MW. We believe that, in the light of developing market conditions, including the Drax divestment, successful completion of this project will strengthen National Power's ability to contest the longer-term market for cleaner power generation in the UK. Energy supply In November November: see month. 1998, National Power reached agreement to acquire Midlands Electricity's 2.2 million customer retail supply business including its employees, power purchase agreements, and use of brand names for (pound)180 million. Shortly after the year end, the government gave conditional clearance for this ground-breaking ground-breaking Adjective innovative acquisition and the deal is expected to reach financial close by the end of June June: see month. 1999. The unification (programming) unification - The generalisation of pattern matching that is the logic programming equivalent of instantiation in logic. When two terms are to be unified, they are compared. of this business with Energy Direct, our national supplier to industry and commerce, will give us around 12% of the total electricity supply market in England and Wales England and Wales are both constituent countries of the United Kingdom, that together share a single legal system: English law. Legislatively, England and Wales are treated as a single unit (see State (law)) for the conflict of laws. . We also acquired Calortex Ltd, a retail company with around 500,000 gas customers, as a further step in repositioning our UK operations into an integrated energy business. Calortex, with a turnover of (pound)77 million in 1998 and net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of (pound)9 million, has grown into one of the largest independent domestic gas suppliers. This purchase, taken together with our electricity supply activities, positions us to become a leading, dual fuel supplier. Once integration is complete, our energy retail business will provide a broad range of energy services nationwide, with the aim of building a five million customer business. Improvements in processes, cost efficiencies and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of the customer portfolio are expected to lead to improved profitability from the business. New trading arrangements We are actively assisting the development and implementation of current reforms to the Pool trading arrangements in England and Wales. We believe that the intended new arrangements will allow the company to maintain maximum portfolio flexibility, actively manage risk and explore new trading opportunities. INTERNATIONAL Existing operations The fall in the earnings contribution to (pound)82 million from our overseas operational portfolio was attributable to the lower contribution from our Hub and Kot Addu power station assets in Pakistan. Provisions of (pound)49 million were made in respect of income earned but not received by both stations for the financial year. Production at Pego Pego can refer to:
EOP Executive Office of the President EOP Equity Office Properties Trust (ticker) EOP Emergency Operations Plan EOP Earth Orientation Parameters in the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. contributed strong positive earnings, as expected, in the second half. The 1,600MW coal plant at Hazelwood Hazelwood, city (1990 pop. 15,324), St. Louis co., E. Mo., a suburb of St. Louis; inc. as a village 1949, city charter approved 1969. Manufactures include aircraft, motor vehicles, microbiology instrumentation, plastics, power tools, medical equipment, and chemicals. also achieved record output. We have high quality overseas plants, which are expected to contribute positively to Group earnings in the future. We expect new earnings in 1999/2000 from the successful completion and commissioning of the greenfield Greenfield, town (1990 pop. 18,666), seat of Franklin co., NW Mass., at the confluence of the Deerfield and Green rivers, near their junction with the Connecticut; settled 1686, set off from Deerfield and inc. 1753. 480MW CCGT at Marmara, Turkey and from our investment in Union Fenosa Generacion SA. Our sharper focus on activities in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , the US, and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. is designed to achieve materiality MATERIALITY. That which is important; that which is not merely of form but of substance.2. When a bill for discovery has been filed, for example, the defendant must answer every material fact which is charged in the bill, and the test in these cases seems to and effective portfolio management in these regions. New investments America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Construction work began on the 1,100MW combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. gas turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. plant at Midlothian, Texas Parameter not given Error... ''Template needs its first parameter as beg[in], mid[dle], or end. Parameter not given Error... , the first in a series of major new gas-fired power stations in our planned US $1.6 billion investment programme over the next three years. The $350 million Midlothian Midlothian (mĭdlō`thēən), council area (1993 est. pop. 79,910), 137 sq mi (356 sq km), and former county, SE Scotland. Under the Local Government Act of 1973, Midlothian was divided between the former Lothian and Borders regions in plant is scheduled to be operational in the summer of 2000. We have made further good progress under the US permitting processes for our other planned CCGT projects. Our committed US power station portfolio now totals 2511MW. This position is the result of our consistent approach towards the development of a material business in the US, since our acquisition of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of National Power (ANP ANP atrial natriuretic peptide. ANP atrial natriuretic peptide. ANP Atrial natriuretic peptide, see there ) in 1993. ANP has recently completed the sale of its 50% stake in the Mecklenburg Meck·len·burg A historical region of northeast Germany on the Baltic Sea. It was originally occupied c. sixth century a.d. by Slavic peoples who were then displaced by Germanic settlements. , 132MW, coal plant in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). to United American Energy Corp. for $25 million. This opportunity to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. its single interest in coal-fired plant in the US enables ANP to focus on its gas-fired merchant plant strategy. ANP will continue actively to manage its portfolio of assets in order to deliver maximum value for shareholders. Australia We won the right to construct, own and operate a 500MW plant at Pelican Point, near Adelaide Adelaide, empress consort of Holy Roman Emperor Otto I Adelaide (ăd`əlād) or Adelheid (ä`dĕlhīt), c. in South Australia South Australia, state (1991 pop. 1,236,623), 380,070 sq mi (984,381 sq km), S central Australia. It is bounded on the S by the Indian Ocean. Kangaroo Island and many smaller islands off the south coast are included in the state. , to help meet the State's growing power Growing Power is an urban agriculture organization headquartered in Milwaukee, Wisconsin. It runs the last functional farm within the Milwaukee city limits and also organizes activities in Chicago. demands. The power station will cost around (pound)170 million. It will be wholly owned by National Power and is being built by ABB n. 1. Among weavers, yarn for the warp. Hence, Noun 1. ABB - an urban hit squad and guerrilla group of the Communist Party in the Philippines; formed in the 1980s , with operations scheduled to begin towards the end of 2000. The project builds on our initial investment at Hazelwood in Victoria and our power trading operation in New South Wales New South Wales, state (1991 pop. 5,164,549), 309,443 sq mi (801,457 sq km), SE Australia. It is bounded on the E by the Pacific Ocean. Sydney is the capital. The other principal urban centers are Newcastle, Wagga Wagga, Lismore, Wollongong, and Broken Hill. , supporting our strategy to develop a portfolio presence in the developing National Market. Europe We have finalized See finalization. our agreement to invest (pound)410 million in a 25% stake in Union Fenosa Generacion S.A. (UFG UFG Universidade Federal de Goiás UFG United Financial Group UFG Up for Grabs UFG United Freight Global UFG United Food Group Inc (Elgin, IL) UFG Unravel Flow-Graph ), which will own Union Electrica Fenosa S.A.'s interests in around 8,500MW of capacity in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. . Our international strategic alliance with Union Fenosa jointly to develop power projects has also now been sealed. Financial close is expected during the next quarter. The investment is expected to be earnings enhancing from acquisition and to contribute significant early international earnings for the Group. We increased our stake in EOP in the Czech Republic to 96% during the year, representing a total investment of (pound)140 million, and are confident of achieving further value from these assets. Our plans to invest in three power station projects in Turkey are progressing, though more slowly than expected as a result of legislative processes and elections. Our existing assets and development projects now provide us with a strong platform on which to build a pan-European business, as EU energy markets are liberalized. New markets We are building a 110MW gas-fired combined heat and power (CHP CHP Chapter CHP Combined Heat and Power CHP California Highway Patrol CHP Cumhuriyet Halk Partisi (Turkish: Republican People's Party) CHP Chemical Hygiene Plan (OSHA) CHP Community Health Plan ) plant in Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. . Construction of the US $89 million Pluak Daeng project has started on an industrial park around 100km south-east Adv. 1. south-east - to, toward, or in the southeast sou'-east, southeast south-east n → sudeste m adj [counties etc] → (del) sudeste of Bangkok Bangkok (băng`kŏk'), Thai Krung Thep, city (1990 pop. 8,538,610), capital of Thailand and of Bangkok prov., SW Thailand, on the east bank of the Chao Phraya River, near the Gulf of Thailand. . The high efficiency plant, to be built by a consortium led by Electrowatt Engineering and Sumitomo, will be wholly owned by National Power. It is scheduled to be operational in the autumn of 2000. We now own some 20% of the equity shares in Malakoff
Malakoff is a commune in the southwestern suburbs of Paris, France. It is located 5 km. (3.1 miles) from the center of Paris. Berhad, the leading independent power company in Malaysia with interests in around 1,800MW of power plant in Malaysia. Our alliance as their exclusive foreign partner and investor in future Malaysian energy projects is developing positively. Our partnership with Ormat operates and develops generating plant, district heating District heating (less commonly called teleheating) is a system for distributing heat generated in a centralized location for residential and commercial heating requirements. and distribution systems supplying Kazakhstan's second largest city, Karaganda. A joint National Power - Ormat management team has begun its planned refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur , efficiency and customer development programmes. COGENERATION cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. AND RENEWABLES Our Cogeneration, Wind Power and Hydro businesses have continued their good progress. Their combined sales revenue increased from (pound)72 million to (pound)87 million. Operating profits were up 29% from (pound)14 million to (pound)18 million for the year. At the year end, our committed cogeneration investments totalled some (pound)310 million, comprising 15 sites totalling 545MW of electricity and 1,175MW of steam. Work began on National Wind Power's 30MW wind farm development in Texas, US. National Wind Power's operational and construction portfolio now totals over 170MW. ENVIRONMENT The company remained within permitted annual emissions limits both in the UK and overseas. Approximately 58% of our electricity production in the UK during the year was from cleaner generating plant. Following the disposal of Drax around 80% of the company's UK output will be provided by gas-fired plant. Overseas, our environmental improvement programmes have continued. YEAR 2000 The company's (pound)15 million project, designed to ensure that the Year 2000 problem Year 2000 problem, Y2K problem, or millennium bug, in computer science, a design flaw in the hardware or software of a computer that caused erroneous results when working with dates beyond Dec. 31, 1999. in computer systems has no material impact on our operations, is progressing. Positive steps have been and continue to be taken to implement solutions for critical systems. The company is also participating in the electricity industry's Year 2000 review being conducted by independent assessors on behalf of the Regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. . As at 31 March 1999 90% of all critical systems in the UK are ready for the Millennium. Although absolute assurances of no material disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. cannot be given, taking into account possible external influences, the majority of the remaining work, and also at our international operational assets, is planned for completion during scheduled outages, well before the calendar year end. FINANCIAL RESULTS Comparisons are based on results before the exceptional items in 1997/98 : comparative figures have been restated to reflect the adoption of changes in accounting policies set out in the Notes to the Accounts. Group profit Profit before tax and exceptional items was (pound)571 million compared with (pound)728 million in the previous year. UK earnings UK operating profits were down(pound)76 million to(pound)792 million. Generation gross margins fell by(pound)149 million reflecting mainly the ending of the coal-backed electricity sales contracts at the end of the last financial year((pound)130 million). The fall in winter prices,reduced constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. income and an increased use of higher priced gas were largely offset by higher output and improved contract income. Operating profit benefited from a reduction in cash and non-cash costs of(pound)46 million and(pound)23 million respectively. Operating costs operating costs npl → gastos mpl operacionales fell by (pound)327 million to (pound)1,941 million. The contract to supply fuel to power stations divested in 1996 ceased during the year, giving rise to a reduction of (pound)206 million. When increased output is taken into account, the net reduction in the cost of fuel for power generation was (pound)66 million. Fuel cost per unit generated fell by over 11%. International earnings Our operational assets overseas delivered profit after tax and minorities of (pound)82 million for the year compared with (pound) 130 million last year,as a result of a lower contribution from our investments in Pakistan. Corporate costs The net cost of providing corporate and development activities of (pound)206 million was up from(pound)168 million in the corresponding period before exceptional items due to a (pound)25 million adverse impact of provisions, an (pound)8 million loss on revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of our Dana investment, and a (pound)10 million increase in development costs, mainly relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc international activities. Interest Net interest costs fell slightly from (pound) 116 million to (pound)114 million. Interest cover (excluding non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue and based on profit on ordinary activities before tax) for the year was just over 8 times. Taxation The effective rate of taxation, which fell from 19% to 17%, benefits substantially from the structure of the 1996 plant divestment transaction. As a result of this and of the lower level of profit, the tax charge on ordinary activities fell from (pound)138 million to (pound)99 million. The company reduced its Advance Corporation Tax (ACT) surplus by some (pound)22 million as a result of the enhanced scrip dividend scrip dividend An unusual type of dividend involving the distribution of promissory notes that call for some type of payment at a future date. Scrip dividends generally signal that a firm is short of cash. Compare liability dividend. alternative to the 1998 final cash dividend offered to shareholders during the first half. A further ACT benefit of (pound)29 million was achieved as a result of deferring payment of the interim dividend for 1998/99 into 1999/2000. Earnings per share Earnings per share fell from 48.5p to 38.3p reflecting a fall in profit after taxation and a small increase in the average number of shares in issue. Dividends An interim dividend of 9.6p was paid on 6 April 1999, comprising an underlying dividend of 9.4p and an enhancement of 0.2p, in recognition of the later payment date. The Directors are recommending a final cash dividend of 19p, making a total dividend of 28.6p per share for the year. The dividend is covered 1.3 times by earnings. The final dividend will be paid on 28 July 1999 to shareholders on the register on 11 June 1999. Staff numbers Staff numbers at the year end were 4,699 compared with 4,321 at 31 March 1998. Of these 1,463 (31%) were employed on our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . Capital investments Capital investment of (pound)606 million was incurred during the period. This included some (pound)148 million investment in Cogeneration and `cleaner' UK plant, and (pound)283 million on international assets, most notably (pound)50 million on EOP in the Czech Republic, (pound)90 million on Malakoff in Malaysia, and (pound)64 million on Midlothian in the US. Debt: Equity Net debt at the year end, excluding non-recourse project debt of (pound)499 million relating to the Hazelwood project, was (pound)1,359 million, up from (pound)1,210 million at 31 March 1998. The gearing ratio Gearing Ratio A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. increased from 50% to 52%. The gearing ratio, inclusive of inclusive of prep. Taking into consideration or account; including. the non-recourse debt, was 71%. Shareholder Funds Shareholders' funds increased from (pound)2,284 million to (pound)2,487 million due to the effect of the take-up of the 1998 enhanced scrip dividend of (pound)89 million and retained profits of (pound)119 million. 19,624,348 new shares were allotted al·lot tr.v. al·lot·ted, al·lot·ting, al·lots 1. To parcel out; distribute or apportion: allotting land to homesteaders; allot blame. 2. during the period. Prior year adjustments Prior year adjustments totalling (pound)333 million arise following the adoption of FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 12 on provisions and the capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. of interest of project expenditure during the course of construction. A full explanation of these changes is provided in the Notes to the Accounts.
NATIONAL POWER PLC
Financial year ended 31 March 1999
PROFIT AND LOSS ACCOUNT Note Year ended Year ended
1998/9 1997/8
(restated)
(pound)m (pound)m
Turnover 3,009 3,354
Operating costs (including
operating exceptional items) (2,348) (2,571)
-------------------------------
Operating profit 661 783
Net interest (114) (116)
Share of profit before tax
of associates and joint ventures 24 72
Profit on ordinary activities before
taxation and exceptional items 571 728
Exceptional items 4 - 11
-------------------------------
Profit on ordinary activities
before taxation 571 739
Tax on ordinary activities (99) (138)
Windfall tax - exceptional item 4 - (266)
Profit after taxation 472 335
Minority interests 1 -
Profit for the period 473 335
Ordinary dividends 5 (354) (329)
Retained profit 119 6
===============================
===============================
Basic earnings per share
before exceptional items 6 38.3p 48.5p
Attributable to exceptional items - (21.0p)
-------------------------------
Basic earnings per share
after exceptional items 6 38.3p 27.5p
Diluted earnings per share
after exceptional items 38.2p 27.4p
Ordinary dividend per share
(including 0.2p enhancement in 1998/9) 28.6p 27.0p
BALANCE SHEET 31 March 31 March
1999 1998
(restated)
(pound)m (pound)m
Tangible assets 4,390 4,278
Intangible assets 20 (5)
Fixed asset investments 617 577
-----------------------------
Total fixed assets 5,027 4,850
-----------------------------
Stocks 147 167
Debtors 637 665
Investment, cash and short-term deposits 1,165 1,069
Creditors: amounts falling due
within one year (1,324) (1,335)
-----------------------------
Net current assets 625 566
-----------------------------
Total assets less current liabilities 5,652 5,416
Creditors: amounts falling due
after more than one year (2,849) (2,824)
Provisions for liabilities and charges (174) (173)
-----------------------------
Net assets employed 2,629 2,419
=============================
Shareholders' funds 2,487 2,284
Minority interests 142 135
-----------------------------
Total equity 2,629 2,419
=============================
-------------------------------
Comparative figures have been restated following changes in account in
policies - Note 1
NATIONAL POWER PLC
Financial year ended 31 March 1999
MOVEMENT IN SHAREHOLDERS' FUNDS Note Year ended Year ended
31 March 31 March
1999 1998
(pound)m (pound)m
Profit for the period 473 335
Ordinary dividends (354) (329)
Scrip dividend share issue 89 -
Other share issues 5 24
Reserves capitalized (6) -
Goodwill - (11)
Exchange differences (4) 5
----------------------------
Net increase in shareholders' funds 203 24
Shareholders' funds at 31 March 1998 2,284 2,260
=============================
Shareholders' funds at 31 March 1999 2,487 2,284
CASH FLOW STATEMENT
Net cash inflow from
operating activities 7 862 819
Returns on investment
and servicing of finance (95) (138)
Tax paid (222) -
Capital expenditure and financial investment (349) (140)
Acquisitions and disposals (161) (232)
Equity dividends paid (130) (341)
----------------------------
Net cash outflow before
liquid resources and financing (95) (32)
Management of liquid resources (43) (447)
Financing 206 665
-----------------------------
Increase in cash 68 186
============================
NET DEBT
Increase in cash (68) (186)
Increase in liquid resources (43) (447)
Increase in financing debt 201 625
Non-cash movements 47 (183)
----------------------------
Net increase/(decrease) in debt 137 (191)
Net debt at 31 March 1998 1,721 1,912
----------------------------
Net debt at 31 March 1999 1,858 1,721
============================
Debt/equity ratio
(excluding non-recourse debt) 52% 50%
Debt/equity ratio
(including non-recourse debt) 71% 71%
NOTES TO THE ACCOUNTS
1. Accounting policies
Except as disclosed below, the accounts for the year ended 31
March 1999 have been prepared using the same accounting policies as
those adopted in the accounts for the financial year ended 31 March
1998.
The comparative figures have been restated to reflect the
adoption of the following changes to accounting policies : The Group
has adopted Financial Reporting Standard 12 (FRS12) which requires
provisions to be made for losses only where obligations exist. This
has resulted in net releases of provisions made in prior periods,
principally relating to liability and damage claims and major plant
repair costs as set out below.
Prior to the adoption of FRS12, major plant repair costs were
charged to the profit and loss account on the basis of the long term
trend underlying the actual incidence of major repairs, with the
difference between the amount so charged and the actual expenditure
being dealt with through provisions. Following the adoption of FRS12,
hot gas path turbine blades, which represent a large proportion of
major plant repair costs, are capitalized and depreciated over their
estimated useful life (typically three years).
Given the increasing level of project development expenditure in
the Group and in view of accepted international accounting practice,
the Directors consider that it is appropriate to adopt a policy of
capitalizing interest on project expenditure during the course of
construction, giving rise to a prior year adjustment of (pound)295
million.
The impact of these accounting policy changes on the year end
figures and their comparatives are as follows:
Adjustment to Profit Adjustment to
Year to Year to Balance Sheet
31 March 31 March at 31 March
1999 1998 1998
(pound)m (pound)m (pound)m
Reduction in provisions:
Rationalization and
restructuring - 2 8
Liability and damage claims - - 29
Major plant repair costs - (4) 15
------------------------------------------
- (2) 52
Depreciation of hot
gas turbine blades 6 (7) (14)
Capitalization of interest 7 17 295
------------------------------------------
Total adjustments 13 8 333
==========================================
2. Abridged accounts
These abridged accounts do not constitute the Company's statutory
accounts for the years ended 31 March 1999 and 31 March 1998.
Statutory accounts for 1998 have been delivered to the Registrar of
Companies, and those for 1999 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those
accounts; their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
3. Group segmental analysis
1999 1998
Operating Operating
Turnover profit Turnover profit
(pound)m (pound)m
(pound)m (pound)m
By class of business:
Electricity sales
- wholesale 2,110 593 2,291 681
Electricity sales
- retail 425 12 448 (7)
Electricity sales -
cogeneration and renewables 87 18 72 14
Eastern lease 224 209 436 215
Other income 136 35 91 37
Corporate and development 27 (206) 16 (157)
--------------------------------------------
3,009 661 3,354 783
--------------------------------------------
1999
Operating Profit for
turnover profit the year
(pound)m (pound)m (pound)m
By geographical area:
Europe (excluding UK) 59 13 14
Australia 119 42 42
USA 24 7 11
Rest of world 47 13 15
------------------------------------
International 249 75 82
UK operations 2,733 792 599
UK corporate
and development 27 (206) (208)
------------------------------------
3,009 661 473
====================================
1998
Operating Profit for
turnover profit the year
(pound)m (pound)m (pound)m
By geographical area:
Europe (excluding UK) 1 1 13
Australia 130 45 45
USA 26 11 13
Rest of world 45 15 59
------------------------------------
International 202 72 130
UK operations 3,136 868 661
UK corporate
and development 16 (157) (201)
------------------------------------
3,354 783 590
====================================
4 Exceptional items
The exceptional item in the comparative figures of (pound)11
million is the profit on disposal of the Group's interest in Southern
Electric plc. An exceptional charge of (pound)266 million was made
last year for the Windfall Tax payable in equal instalments, in
December 1997 and December 1998.
5. Dividends
Year ended Year ended
31 March 31 March
1999 1998
(pound)m (pound)m
Per ordinary share:
Interim dividend of 9.6p (1998: 9.0p) 119 109
Final dividend of 19.0p (1998: 18.0p) 235 220
---------------------------------
Ordinary dividends 354 329
===================================
6. Earnings per share
Earnings per share before exceptional items is based on profit
after taxation and after minority interests but before exceptional
items of (pound)473 million (1998: (pound)590 million) attributable to
ordinary shareholders divided by the weighted average of 1,233 million
(1998: 1,217 million) ordinary shares in issue for the twelve months
ended 31 March 1999. The comparative figures for earnings per share
after exceptional items is based on a profit after taxation of
(pound)335 million. On a fully diluted basis, the weighted average
number of shares was 1,237 million (1998: 1,222 million).
7. Reconciliation of operating profit to net cash inflow from
operating activities
Year ended Year ended
31 March 31 March
1999 1998
(pound)m (pound)m
Operating profit 661 783
Tangible fixed asset depreciation
charged to profit and loss 327 309
Other non-cash movements 59 23
Revaluation of current
asset investments 11 -
Other amortisation - 9
Profit on disposal of fixed assets (31) (13)
Movement in working capital:
Decrease in stocks 20 14
Increase in debtors (12) (45)
Decrease in creditors (165) (246)
Provisions utilized (17) (22)
Provisions charged to profit and loss 9 7
=================================
Net cash inflow from
operating activities 862 819
=================================
US GAAP RESULTS
US Generally Accepted Accounting Principles (GAAP) differ in
certain significant respects from UK GAAP. The US GAAP results are set
out below. For convenience only, the figures are stated in US$,
translated at the rate of (pound)1=$1.614, the Noon Buying Rate of the
Federal Reserve Bank of New York on 1 April 1999 (1998:
(pound)1=$1.674).
Year ended Year ended
31 March 31 March
1999 1998
$m $m
Net income 787 442
Shareholders' equity 3,731 3,491
Earnings per share after
exceptional items $0.64 $0.36
Earnings per ADS after
exceptional items $2.55 $1.45
FINANCIAL CALENDAR
Financial year ending 31 March 1999
Announcement of full year results 26 May 1999
Ex-dividend date 7 June 1999
Full dividend record date 11 June 1999
Annual General Meeting 27 July 1999
Final dividend payable 28 July 1999
National Power is holding a presentation for analysts and institutions at 10:00am at Grocers Hall, Princes Street, London, EC2R 8AD. If you are unable to attend but would like to listen to the 10:00am presentation the number to call is: 44(0)181 515 2310 In addition their will be a US Conference call at 10:39 US Eastern time. The number for that is: 888/886-7046 A copy of the Presentation will also be available on National Power's website from 10:00am - http://www.national-power.com |
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