5th Mar 2007 07:04
Scottish & Southern Energy PLC05 March 2007 SCOTTISH AND SOUTHERN ENERGY PLC INTERIM MANAGEMENT STATEMENT AND DIVIDEND POLICY Scottish and Southern Energy plc ("SSE") has completed a review of its dividendtargets for the period until 31 March 2010 and will set out the details in apresentation to investors and analysts at the Edison Electrical InstituteInternational Utility Conference which begins in London today. As part of the new targets, the Board expects to recommend to shareholders afinal dividend of 39.9p per share in respect of the year ending 31 March 2007,compared with 32.7p in the 2005/06 financial year, an increase of 22%. This willmake a full year dividend of 55p, compared with 46.5p last year, an increase of18.3%. This increase is also designed to provide a significantly higher base for futuredividend growth. From this new, higher base, SSE's target will be to deliver atleast 4% real growth in the dividend paid to shareholders in respect of 2007/08,2008/09 and 2009/10. Thereafter, SSE expects to continue to deliver at leastsustained real growth in the dividend. This new policy replaces SSE's existing dividend targets, which were to deliverat least 4% real growth in the dividend payable to shareholders in respect of2006/07 and 2007/08, with sustained real growth thereafter. The review has taken place as SSE nears the end of the second year of thefive-year Distribution Price Control period. A similar review took place at thesame point in the previous five-year Distribution Price Control period, in 2002. The expected full-year dividend in respect of 2006/07, of 55p, compares with32.4p for 2001/02, since when the dividend will have increased by 69.8%, whichrepresents a compound annual growth rate of 11.2%. It will also be double thedividend paid by SSE to shareholders for the financial year ending 31 March2000. In 2007/08 and subsequently, it is expected that the final dividend willrepresent around two thirds of the total annual dividend paid and the interimdividend around one third. SSE will also tell investors and analysts that it has now achieved over 7.7million energy supply-related customers - an increase of 200,000 since itsinterim results in November 2006 and of one million since the start of thecurrent financial year on 1 April 2006. SSE expects to report on 31 May preliminary results for 2006/07 which are inline with the current consensus of brokers' forecasts. Sir Robert Smith, Chairman of SSE, said: "Our decision to step up our dividend targets follows our analysis of theperformance of, and prospects for, the business. That analysis has confirmedthat SSE is in an excellent position to deliver very good results in the yearsahead and our enhanced dividend policy reflects this." Ian Marchant, Chief Executive of SSE, will tell delegates at the InternationalUtility Conference: "SSE's strategy is to deliver sustained real growth in the dividend payable toshareholders through the efficient operation of, and investment in, a balancedrange of regulated and non-regulated energy-related businesses. "This strategy has continued to be successfully implemented in 2006/07, with keyoperational successes including the achievement of over 7.7 million energysupply customers. This continuing growth in customer numbers clearly follows ourcommitment to responsible energy pricing - again demonstrated by the price cutswhich we started to implement last week - and to sector-leading customerservice. We have also significantly improved power station availability during this year,and made good progress with our investments in electricity generation atGlendoe, Ferrybridge, Fiddler's Ferry and Marchwood. "This good progress is being matched in our other major investments inelectricity networks and gas storage, with the first new capacity at Aldbroughon course to be commissioned later this year. "Our electrical Contracting business has continued to perform well and ourConnections business has also continued to develop, with the recentcommissioning of the out-of-area electricity network for Francis Flower inRuncorn. "As our major investment programme bears fruit, our asset base in energynetworks, electricity generation, energy supply and gas storage, which has grownsubstantially in recent years, will again increase significantly in the comingyears. "This growth in assets will continue to be allied to ongoing improvements inoperational performance, which remains central to our future businessdevelopment. We will also continue to examine other opportunities for growth,although the achievement of our new dividend growth targets is not dependent onthem. "SSE's core objective is the delivery of sustained real growth in the dividend,and today's announcement means we will have doubled the dividend in just sevenyears. With the company approaching the tenth anniversary of its formation, atthe end of next year, our new targets set the scene for the achievement of morethan a decade of sustained real growth in the dividend." Enquiries to: Scottish and Southern Energy plcAlan Young - Director of Corporate Communications + 44 (0)870 900 0410Sally Fairbairn - Investor Relations Manager + 44 (0)870 900 0410 Financial DynamicsAndrew Dowler + 44 (0)20 7831 3113 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SSE