Performance Report 2004
We have seen continued growth in the company over the past 12 months: turnover has increased, as has operating profit. Much of the increase in turnover is a result of increased energy prices. Continued synergy savings have been delivered, following the integration of Seeboard with the LE Group to form EDF Energy. Cumulative cash savings now stand at £148 million and contribute to the increase in operating profits.
The creation of one company has presented many opportunities, but also many challenges. Substantial cost saving opportunities exist in procurement as well as in operational efficiencies, which allow us to deliver a better, more responsive service to our customers. Realising these performance improvements has required some tough decisions to be made. The most significant was to reduce the workforce across the company. Whenever change is planned, we aim to consult with employees and to keep them informed about developments. During 2005, our metering business, along with certain support functions, will undergo restructuring.
At the end of 2004, the final proposal under the Distribution Price Control Review (DPCR) was agreed with our regulator, Ofgem. This was an important process for us, as it determines how much capital we invest in our network infrastructure, which affects both the reliability and the value of the networks, as well as the amount we can charge for electricity distribution. Part of the DPCR settlement for EDF Energy was a substantial increase in the level of investment allowed by Ofgem. This is expected to increase the value of the networks by approximately £1 billion over the next five years. Over all, EDF Energy considers that, while it presents significant challenges, the outcome of the DPCR is satisfactory.
EDF Energy plc Annual Report and Financial Statement 31 December 2004 [PDF]
2007 TARGET |
Increase the value of the business by 15% |