TOP NEWS: SSE Plans Annual Payout Rise Ahead Of Transitional New Year

29th Mar 2018 09:47

LONDON (Alliance News) - FTSE 100-listed utility provider SSE PLC confirmed its intention to grow its full-year dividend, as it said Thursday it expects its wholesale business to see a sharp rise in profitability while forecasting a challenging new financial year amid a number of changes.

For the current financial year ending Saturday, SSE expects to increase its dividend at least in line with UK retail prices index inflation of 3.7%. In financial 2017 SSE paid 91.3 pence per share in dividends, suggesting at least 94.68p for financial 2018.

SSE also anticipates all three of its units - wholesale, retail and networks - to be profitable, despite mixed fortunes.

In wholesale it expects operating profit to be "significantly" higher than the year before. This is after it increased its electricity output from its renewable and gas-fired generation plant.

In networks, SSE anticipated adjusted operating profit to be around GBP150 million. This is after it disposed of part of its stake in SGN in October 2016 and as a result of phasing of returns in the price-control mechanism for electricity transmission and distribution.

Retail operating profit is expected to be in line with the prior year.

In financial 2017, wholesale generated GBP514.6 million in operating profit, networks made GBP936.5 million, and retail produced GBP422.3 million, SSE said.

SSE also predicted the new financial year will likely be one of "transition". With the planned demerger of its UK household energy supply business to merge with innogy's business and the "unclear" impact of a potential gas and electricity tariff cap, SSE emphasised that "uncertainties" loomed over it.

SSE expects its dividend and dividend policy from financial 2020 to "reflect the quality and nature of its assets and operations, the earnings derived from them and the longer-term financial outlook" of the business after the demerger.

"As expected, 2017/18 has involved a number of significant challenges, but SSE is a robust, sustainable business that has kept its strong operational focus on meeting the needs of customers," SSE Finance Director Gregor Alexander said. "It has also kept its focus on efficient investment in the energy assets needed now and in the future. This means we are in a good position to deliver financial results ahead of our expectations at the start of this financial year."

"The challenges are not expected to relent in 2018/19," Alexander added, "and it will be a year of major transition and change for SSE. Throughout the year, we will retain our strong operational and investment focus, while preparing the businesses in the SSE group for the important developments that lie ahead."

Shares in SSE were 0.5% higher at 1,301.00p on Thursday.

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