SOURCE: Scottish Power PLC

October 10, 2005 02:01 ET

Scottish Power PLC - Trading Statement


ScottishPower will shortly be meeting with analysts ahead of entering our pre-close period for the quarter ending 30 September 2005.

At these meetings we will confirm that we continue to make good progress with our key strategic objectives of driving further efficiency improvements in each of our businesses and delivering attractive returns from our organic investment programme while the sale of PacifiCorp and return of approximately GBP2.5 billion to shareholders is proceeding on schedule. Overall, our trading outlook for the full year to 31 March 2006 remains in line with our expectations.

In the second quarter, our UK businesses performed strongly continuing the trends that we reported in our first quarter's results. Energy Networks is performing well following the recent regulatory reviews and our Energy Retail and Wholesale businesses are benefiting from last years significant growth in customer numbers and investment in generation plant. At PPM Energy, construction of the 575MW of windfarms announced for 2005 is on schedule. As we reported in the first quarter, we expect PPM Energy's profit for the full year to be ahead of last year however its second quarter results will be lower than the equivalent period last year due to the phasing of earnings recognition from our contracted gas storage business.

In September, we announced a corporate restructuring that will result in annualised cost savings of GBP60 million a year. Detailed plans have been completed, communicated to staff and are now being implemented. Restructuring costs are expected to total GBP35 million, of which the first tranche will be reported this quarter.

The sale of PacifiCorp is proceeding on schedule and its financial results for the quarter are in line with our expectations.

The group has applied IAS 39 "Financial Instruments: Recognition and Measurement" ("IAS 39") with effect from 1 April 2005. We anticipate that IAS 39 will have a significant adverse impact on statutory results this quarter due principally to movements in the fair values of the convertible bond and the portfolio of energy contracts. While IAS 39 will cause the statutory results to be more volatile than those reported under UK GAAP, this change in accounting treatment does not impact the underlying operational and financial performance of the group nor its current or future cash flows.

ScottishPower's half-year results will be announced on 10 November 2005.

For further information:

Jennifer Lawton   Head of Investor Relations               0141-636-4527
Colin McSeveny    Group Media Relations Manager            0141-636-4515

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