"Investing For Growth"
1 April to 30 September 1998

• Turnover up 5.4% to £1,444 million
• Profit before tax up £2 million to £247 million
• Earnings per share up 1.3% to 16.05p
• Dividend per share up 10.3% to 7.50p
• Leading position in competitive electricity and gas markets
• Continued focus on cost efficiency
• Investing to grow the business

Murray Stuart, Chairman of ScottishPower, said:

"We have achieved strong operational progress in each of our major businesses in the first six months of the year, with financial performance meeting our expectations.

Most notably, our energy business established itself at the forefront of competition in the domestic electricity market. The substantial investment made over the past two years in systems, customer service and billing arrangements, all came together to ensure that both ScottishPower and Manweb were two of only four electricity companies ready to meet the launch date. We have made a good start in the new competitive world and have already won some 475,000 domestic gas customers and over 60,000 domestic electricity customers. We believe that as competition extends across the UK we will continue to be a strong and effective player in this market place.

Investment in ScottishTelecom has seen the business continue to grow strongly, with turnover almost double that of the first half of the previous year. The business has expanded and developed further into new areas of the market place.

Improvements in cost efficiency and customer service, particularly in Power Systems and Southern Water, have continued. This is particularly important given the forthcoming regulatory reviews for these businesses. We are evaluating the impact of the recent OFWAT consultation paper - Prospects for Prices. We will be presenting a strong case to the regulator, including the case for price stability over the next price control period.

Group profit before tax was up £2 million to £247 million, with operating profit growth offset by costs for building the gas supply and electricity customer base. Earnings per share were 16.05p and the net dividend per share was increased by 10.3% to 7.50p. Capital expenditure totalled £317 million, an increase of £45 million, reflecting our investment in infrastructure in Southern Water and Power Systems and in the growth of our energy and telecoms businesses.

Looking ahead we believe the investments which we are currently making to build our asset base and to grow our market share in our energy, water and telecommunications businesses will deliver significant value for shareholders."

Further Information:
Ian Robinson,                  Chief Executive                                   0171 628 5646
Ian Russell,     Deputy Chief Executive and Finance Director     0171 628 5646
Sue Clark,                  Director of Corporate Affairs                   0171 628 5646
Andrew Grant,                     Brunswick                                     0171 404 5959