The firm is to increase capital spending in the next five years

The Glasgow-based firm said profit rose to �675m ($1.27bn) for the year to 31 March, following what it called an "improved operational performance".

But the firm, which on 1 March raised gas prices by 15% and electricity by 8%, warned that bills would rise again.

"Further rises will be unavoidable in the short-term given continuing high wholesale prices," it announced.

'Well positioned'

Philip Bowman, Scottish Power chief executive, said all the group's businesses had delivered very good growth.

"With the sale of PacifiCorp completed, Scottish Power now has a strong set of businesses that are well positioned in their markets and offer attractive prospects for future growth," he said.

The company also said it wanted to invest more in its businesses and had upped capital spending by �1.3bn, to �4.8bn, for the period to 2010.

The extra money will be used to renew infrastructure in its energy networks division, extending the life of the Longannet coal-fired power plant and building up PPM Energy, the US-based windfarm business it owns.