11th Aug 2019 10:50
(Alliance News) - Power utility SSE PLC is in discussions with Ovo Group over the possible sale of its struggling energy services business.
In May, FTSE 100-listed SSE announced plans to offload its energy services segment after more than half a million households switched to a new supplier in the year ending March 2019.
The Big Six company vowed to sell or float its energy services arm – which has around 5.7 million customer accounts – by the second half of 2020.
To this end, it appointed a separate board for the division headed by executive chairwoman Katie Bickerstaffe
SSE announced on Saturday that Ovo Energy is a potential buyer.
If it goes ahead, the sale would turn Ovo into one of the UK's largest energy suppliers overnight having been founded just 10 years ago.
SSE said in a statement: "These discussions are continuing, however no final decisions have been taken and no agreements regarding the terms of any transaction have been entered into.
"The board remains focused on securing the best long-term future for the business, its customers and employees, and for shareholders."
It said the company would not be commenting further until talks with Ovo have concluded.
Outside of energy services, SSE previously admitted that its wider business "fell well short" of its hopes in 2018-19 and warned 2019-20 earnings would also be hit.
The group's annual underlying pre-tax profits fell 38% to GBP725.7 million.
The figures came on the back of a tough year for SSE following the collapse of its Npower merger.
It was also fined GBP700,000 by Ofgem in April for missing last year's target to install gas smart meters for customers.
By Tess de la Mare, PA
source: PA
Related Shares:
SSE