"The return to somewhat more normal winter temperatures in Victoria and South Australia during July, August and September was welcome, with gas use in the domestic market, from which Envestra generates about 90% of its revenue, up over 8%," said chairman John Allpass.

The growth has been partly attributed to strong growth in the number of consumers supplied by Envestra's networks, with over 5,100 new properties connected during the first quarter of 2003/04, taking the company's total number of consumers to around 910,000.

Envestra also announced that the distribution to shareholders for the six months ended 30 September would be 5.7 cents, with the full-year distribution expected to be 9.5 cents.

The company's strong financial position has also lead to speculation of acquisitions with company managing director Ian Little telling shareholders at the AGM that there is $4 to $5 billion of gas infrastructure likely to come to the market in the next 12 months and that Envestra would carefully assess some of these opportunities.

"With support from our major shareholders, Origin Energy and Cheung Kong Infrastructure, and ready access to capital markets, we believe Envestra has a strong competitive position to acquire further assets in the gas industry."

Little described Epic's plan to sell its pipeline assets by January as unrealistic and the company's financial situation as troubled but maintained that Envestra would continue to examine the deal.

"However, the company will only consider an acquisition if it will add value to our shareholders, improve our financial position and reinforce or grow our current distributions", said Little.