PROFITS at Northern Ireland Electricity (NIE) have increased by 24 per

£107.4 million sterling for the year to the end of March.

The huge growth in profits was posted against a much slower rise in turnover, which increased by 5 per cent to £524.7 million.

The better than expected results, coupled with the news that NIE may buy back another 14.9 per cent of its stock, helped lift the company's London share price by 20p to 434p.

NIE said the increased turnover and the continued control of operating costs had helped boost operating profits from £94.6 million to £105.9 million. Earnings per share were up 43 per cent to 58.8p while the total dividend was up 42 per cent to 19p.

The impact of the north-south inter-connector led to cost savings of about £1 million for NIE, according to finance director, Mr Gordon Woodworth. Before the inter-connector was re-introduced, NIE operated with 22 per cent spare capacity so that supplies would not be cut if parts of the network failed.

The inter-connector enables NIE and the ESB to reduce the standby capacity on each network thus saving on cost.

During the year NIE's capital spending increased by almost 14 per cent to £66.5 million and the benefits of this expenditure are beginning to bring an improving performance, according to the company.

With no further provisions for restructuring costs, earnings for the year increased from £67.5 million to £87.2 million.

NIE, which has cut staff numbers by more than one-third over the past four years, set aside £12 million for restructuring costs last year. About 180 staff took voluntary redundancy bringing employment to 2,570.

Electricity prices in the North increased by 2.3 per cent. The price rise would have been more than 5.4 per cent but for the first £16 million tranche of subsidy from the British government.

NIE does not generate electricity, buying it instead from privately owned power stations in the North. The company therefore does not have full control of its costs.

Mr Woodworth said that on average about 60 per cent of domestic electricity charges relate to the generators. The percentage rises to 80 per cent with industrial customers, he added.

Generation costs are high in the North because NIE is fixed into long term contracts with the generators, but this system is currently under review by the government-appointed Regulator.

Last year, NIE spent £97.4 million buying back and cancelling 14.9 per cent of its own stock, reducing the number of shares in circulation from 164 million to 139.47 million.

The directors will seek shareholder authorisation to buy back another 14.9 per cent of the company's shares at this year's a.g.m.