18th Nov 2020 09:03
(Alliance News) - SSE PLC on Wednesday said its profit was sharply higher in the first half of its financial year after substantial exceptional gains, in large part relating to its asset disposal programme.
The FTSE 100-listed utility is based in Perth, Scotland and posted a GBP829.5 million profit for the six months ended September 30, multiplying from GBP128.9 million a year before.
The big change, SSE said, reflects: "Pretax exceptional gains of GBP654.4 million recognised during the year mainly driven by a combination of progressing with the group's GBP2 billion plus non-core asset disposal programme and IFRS 9 remeasurements on operating derivatives."
This compares to a GBP99.6 million pretax exceptional loss the prior year.
Adjusted pretax profit, which excludes exceptional items, fair value movements on financing derivates, and other factors, fell 26% to GBP193.9 million from GBP263.4 million.
Revenue declined 7.5% to GBP2.82 billion from GBP3.05 billion.
The company declared an interim dividend of 24.4 pence per share, up 1.7% from 24.0p per share the prior year, and intends to recommend a full-year dividend of 80p per share plus RPI inflation having paid out 80p per share in its previous year.
Looking ahead, adjusted earnings per share is estimated at between 75p and 85p per share, having been 83.6p the year before. SSE also expects a full-year Covid-19 hit to operating profit in the middle of the GBP150 million to GBP250 million range predicted in June. Reported EPS, reflecting gains on disposals, is expected to be far in excess of 150p versus 40.6p in financial 2020.
At the end of March 2021, SSE predicts its adjusted net debt will be around GBP9.5 billion, down from GBP10.5 billion the prior year.
SSE is still targeting a net debt to earnings before interest, tax, depreciation, and amortisation at the lower end of 4.5 to 5 times range between financial 2022 and financial 2025.
SSE also confirmed that its GBP7.5 billion investment plan for the five years to March 2025 is expected to be fully financeable and will be consistent with its net debt to Ebitda target ratio, with no requirement to change its capital structure. This is based on its disposal programme delivering proceeds "well in excess of GBP2 billion".
Chair Richard Gillingwater said: "Our disposals programme is on track, real progress is being made against the capex plan and we have the balance sheet strength to deliver what is an enviable low-carbon development pipeline. In all of this activity we are contributing solutions to the global problem of climate change and ultimately promoting the long-term success of the company for the benefit of all our stakeholders."
John Manzoni, who joined SSE as a non-executive director in September, will take over from Gillingwater as chair at the start of April 2021.
Shares in SSE were up 0.2% at 1,350.50p in London on Wednesday morning.
By Anna Farley; [email protected]
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