Five year dividend unveiled
SSE sees profits fall as customers switch supplier
SSE has seen an exodus of customers
Energy company SSE saw profits dented last year as it lost 430,000 customers and incurred costs upgrading its network business.
Adjusted pre-profits fell 6% to £1.45 billion and bottom line profits by 39% to £1.09bn.
The accounts are likely to be the last in the Perth-based company’s current form as it plans to merge its retail operations with Npower.
Richard Gillingwater, Chairman of SSE, said: “As expected, 2017/18 presented a number of complex challenges to manage, but SSE’s operational performance was generally very robust and significant progress was achieved in key aspects of the company’s capital investment programme. It is encouraging that the company’s financial results are ahead of expectations at the start of the financial year.
“The challenges will continue in 2018/19, which is also expected to be a year of major transition for SSE. A strong operational and investment focus on meeting the current and future needs of energy customers is essential, as is preparing the businesses in the SSE group for the changes that lie ahead.
“SSE’s strategic goal is to create value in a sustainable way, for shareholders and society. The changes we are making as we renew SSE are intended to have positive outcomes over the long term for customers, stakeholders and investors.
“For investors, by giving clarity on the dividend for the five years to March 2023, SSE is demonstrating that remunerating them for their investment is and will remain its first financial objective.”
The company expects its capital and investment expenditure to total around £6 billion over the next five years and has outlined its dividend policy over the period.
The recommended full-year dividend for 2017/18 is 94.7 pence per share, an increase of 3.7%.
For 2018/19, SSE is intending to recommend a full-year dividend of 97.5 pence per share, an increase of 3% on 2017/18, which is broadly in line with expectations for RPI inflation.
For 2019/20, SSE is planning to set the first post-transaction dividend at 80 pence per share, which reflects the impact of the changes in the SSE group expected to take effect by then.
For 2020/21, 2021/22 and 2022/23 SSE is targeting annual increases in the full-year dividend that at least keep pace with RPI inflation.
This plan for the dividend for the five years to March 2023, when the current electricity distribution Price Control comes to an end, supersedes SSE’s previous reference to a dividend cover range