BRITISH Energy has a strong future and can develop new nuclear plants even without a partner, its chief executive said yesterday, as the company fended off questions about bidders.
The East Kilbride-based power group is understood to be in talks with some of Europe's largest utilities that could lead to it being taken over, with attention focused on the development of the next generation of nuclear plants in the UK.
British
Energy, which owns seven nuclear reactors, is viewed as owning the most likely sites for future plants.
But chief executive Bill Coley said finding a partner was not the only option available to the business, and it could take part in new development alone.
"If you take a look at the company, where we are, and ask, 'can we have a good future in new nuclear as British Energy as we are today?' Yes we can," he said.
"Can we have a larger position otherwise if we're involved with someone else? Yup. To the degree that we've got a stronger balance sheet and access to money? No doubt about it, but is that our only hand? The answer is no."
British Energy refused to comment on potential bidders, saying only that talks were ongoing.
Coley declined to comment on how long the company was prepared to be in negotiations over its future before it would call a halt to talks.
He denied the talks were distracting staff.
"I've spent a lot of time working with employees in the company recently and looking at whether they are focused. Am I seeing a ground swell of concern? No," he said.
Yesterday, British Energy revealed a sharp fall in profits in the year to 31 March, with earnings before interest, tax, depreciation and amortisation falling to £882 million, down from £1.2 billion in the previous year.
The drop was caused by problems and unplanned power stoppages across several of its reactors, increasing outages and forcing the company to turn to the wholesale market to buy electricity it was unable to generate.
But the earnings were still ahead of market forecasts, boosted by higher electricity prices in the final quarter of the year.
Coley said the current high wholesale electricity prices would have only "modest" impact on British Energy's profits in the short term, with most of the current year's generation already contracted for sale.
However, in the longer term, the price at which the company is selling power is increasing. This year's generation is contracted for sale at an average of £43 per megawatt hour, but the company recently completed a deal for the 2010-11 financial year at £65 per megawatt hour.
Coley said that despite a host of problems in recent years, British Energy's nuclear plants were in better shape than they were several years ago. Despite an unplanned power outage at Sizewell B yesterday, the plant's performance was "among the best of any in Europe", Coley said.
British Energy shares fell 12p to 725p yesterday, which traders blamed on a lack of news on the bidding process.
The full article contains 518 words and appears in The Scotsman newspaper.
