Following an exceptionally poor trading performance by SSE's (SSE) wholesale business last year, the group's latest half-year figures suggest the business is back on track. Wholesale operating profits came in at £160m, against £26.7m a year ago. While fair-value movements in the group’s investment portfolio depressed pre-tax profit, adjusted pre-tax profit grew by almost half to £549m.
There was a mixed bag on the operating front. Following the closure of the Ferrybridge unit 4 and planned outages at its Medway, Marchwood, Fiddler’s Ferry and Ferrybridge plants, generation from thermal power stations dropped by almost half to 4,239 gigawatts (GWh). In contrast, windier and rainier weather conditions meant renewable energy generation was on the rise.
Customer accounts for the group's retail business continued to fall during the first-half, down by 5 per cent to 8.4m. However, the group's energy supply business recovered, generating £74m in operating profit compared with a £17m loss the same time last year. This was thanks to a better performance in the industrial and commercial sector and lower-than-usual temperatures boosting gas consumption. SSE's supply business was also able to benefit from reduced wholesale gas prices. However, management expects its domestic energy supply profit to fall for the full-year, following its reduction in household gas prices in April.
SSE (SSE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,473p | MARKET VALUE: | £14.8bn | |
| TOUCH: | 1,472-1,473p | 12-MONTH HIGH: | 1,696p | LOW: 1,395p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 265p* | NET DEBT: | 138% † | |
| Half-year to 30 Sept | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 12.41 | 317 | 25.8 | 26.6 |
| 2015 | 13.83 | 231 | 19.4 | 26.9 |
| % change | +11 | -27 | -25 | +1 |
Ex-div:21 Jan Payment:18 Mar *includes intangible assets of £786m, or 78p a share † Includes hybrid capital. | ||||
