• Turnover up £187m (6%) to £3,128m
• Profit before tax up £81m (15%) to £640m
• Profit after tax (including windfall tax of £317m) down £251m to £171m
• Earnings per share before windfall tax up 3.2p (8%) to 41.3p
• Dividend per share up 1.9p (10%) to 20.4p
• Won 320,000 domestic gas customers and in pole position for electricity liberalisation
• ScottishTelecom growing rapidly - met its target operating profit of £4m

Murray Stuart, Chairman of ScottishPower, said:
"In the year ended 31 March 1998 ScottishPower has met strongly the challenges created by rapid change affecting the utility sector. We have continued to drive efficiency improvements, enhance customer service and invest to build the business. We have also completed the transition plan for Manweb and have made good progress at Southern Water, delivering value ahead of our pre-acquisition expectations.

I am pleased to report another very satisfactory year of financial performance. Pretax profits were £640 million, an increase of 15% over the previous year. Earnings per share, before windfall tax, at 41.3p were up 3.2p or 8%. We are recommending a final dividend of 13.6p net per share, which will result in a full year payment of 20.4p net per share, an increase of 10%. This dividend is covered 2.0 times by earnings before windfall tax. Capital investment was £630 million in the year. Gearing at 31 March fell to 114% and would have fallen to 100% but for the windfall tax. Interest cover remained prudent at 5.3 times.

As the energy markets progressively open to competition we have made substantial progress towards delivering our multi-utility strategy. We have gained 320,000 domestic gas customers positioning us as a leading new entrant in the gas supply market. In electricity we will be amongst the first companies to compete when the domestic market begins to open up in September. Operational and financial performance at Southern Water has improved significantly in its first full year in the ScottishPower group. ScottishTelecom has continued to grow rapidly, both organically and through several focused acquisitions, and the company met its target operating profit of £4 million in only its third full year.

ScottishPower has established itself as a substantial multi-utility group with a customer base of 5 million homes across the United Kingdom. We are strongly positioned in both operational and financial terms. In the next year we will be investing significant capital and revenue in the company to build long term value for our shareholders. Looking ahead we foresee further changes in the utility industry, both at home and abroad, and continued challenges in terms of regulation and competition. The quality of our staff, and our experience to date in dealing with these issues, give us confidence that we will be able to turn these challenges into opportunities."

Further Information:
Ian Robinson,             Chief Executive                     0171 767 1000
Ian Russell,               Finance Director                     0171 767 1000
Sue Clark,          Director of Corporate Affairs        0171 767 1000
Andrew Grant,               Brunswick                         0171 404 5959