Energy giant ScottishPower has come under renewed fire for doubling its
annual profits to nearly £1230 per minute after hitting customers with
inflation-busting price rises.
Net profits at the Glasgow-based energy giant have soared from £301.6m in
2011 to £646.3m in 2012.
In January, ScottishPower, which has 5.2 million customers, faced criticism
from consumer groups after it imposed a 7% hike in its gas and electricity
costs..
The big six energy firm’s latest accounts also reveal £890m in dividends
were paid to shareholders of Spanish parent company Iberdrola in the year –
more than £200m more than the profits for the year – as a “catch-up” as no
dividend was paid in 2007 or 2011.
Gillian Guy, chief executive of Citizens Advice, said: “These high profits
come out of the pockets of hard-pressed consumers, many of whom are already
struggling to make ends meet.
“Citizens Advice Bureaux across Britain see too many families forced to
choose between heating and eating, or running up debts so they can afford
to keep their homes warm and dry. Energy firms must start putting their
customers above their shareholders and do more to curb price rises and keep
bills low.”
Ann Robinson, director of consumer policy at uSwitch.com added: “At the
very least this doubling of profits has to beg a question over whether last
winter’s price increases were justified.
“Now would be a good time for ScottishPower to reassure its customers about
the forthcoming winter by promising to hold its prices steady.”
The results come five months after the company was criticised for imposing
an increase of 25% on service charges to households cut off due to
outstanding bills.
Trisha McAuley, the Scottish director of Consumer Futures, the regulated
markets watchdog said: “Consumers do not know whether they can believe the
relationship between energy prices, company profits and the wholesale price
of energy. Greater transparency is vital to know whether there is scope for
companies to avoid price rises.”
The salaries of ScottishPower’s executive directors – including fees,
benefits and bonuses – have also soared from £217,000 in 2011 to £723,000
in 2012.
Last year the company appointed Keith Anderson as chief corporate officer
increasing the numbers in the board room to five. He became the
highest-paid director receiving £503,000 a year.
Bonuses to the directors also rose from £19,000 to £129,000.
Last week ScottishPower unveiled plans to spend £5.2 billion to upgrade its
power distribution network. But it was unable yet to say how much of the
65,000 miles of the overhead and underground network would be upgraded
between 2015 and 2023 until inspections are complete.
The investment would also upgrade 2500 substations between 2015 and 2023.
The firm said in April it was investing £4bn up to 2014 in the UK,
representing 40% of its global investments, with two-thirds of the
investment planned for Scotland.
A ScottishPower spokesman said of the latest results: “Our overall profit
margin for the ScottishPower supply business was 4.4% for 2012 which can be
viewed as an appropriate level of return given the size of our asset base
and the scale of investments ScottishPower is making in the UK.
“In total across all ScottishPower business we made a net profit of £646m
in 2012 but invested £957m in the UK.”
Of the shareholder dividends, the spokesman said: “This higher than normal
payment was a catch-up. This brings total dividends paid between 2007 and
2012, to £1.8bn. In comparison, in the same period over £4bn has been
invested by ScottishPower in the UK.”
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