Falling retail customer numbers, lower wholesale power prices and a reduction in allowed revenues meant a lacklustre performance across all of SSE 's (SSE) divisions last year. Yet management came good on its aim to keep the dividend rising at least in line with inflation, calculated through the retail prices index. However, earnings cover for the dividend slipped again to 1.34 times, down from 1.40 the previous year.
The majority of SSE's asset base and operating profit is now generated by its networks and renewable energy businesses. A 12 per cent increase in the latter to 9,695 gigawatts an hour (GWh) marginally pulled up operating profit for the wholesale business to £436m. The energy giant's networks business put in a mixed performance, with operating profit falling slightly to £927m. Lower allowed revenue under Ofgem's snappily named Revenue = Incentives + Innovation + Outputs (RIIO ED1) price control framework hit electricity distribution operating profit, and was only partly offset by an increase in electricity transmission.
Customer numbers in SSE's retail business fell from 8.58m to 8.21m. An increased market share in the industrial and commercial sector was offset by a reduction in enterprise profits, due to business disposals.
Prior to these results analysts at Whitman Howard forecast adjusted EPS of 124.1p for the financial year ending March 2017, rising to 134.4p in FY2018.
SSE (SSE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,535p | MARKET VALUE: | £15.5bn | |
| TOUCH: | 1,534-1,535p | 12-MONTH HIGH: | 1,696p | LOW: 1,317p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 516p | NET DEBT: | 130% | |
| Year to 31 March | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 31.7 | 269 | 21.0 | 80.1 |
| 2013 | 28.3 | 601 | 42.0 | 84.2 |
| 2014 | 30.6 | 575 | 33.5 | 86.7 |
| 2015 | 31.7 | 735 | 55.3 | 88.4 |
| 2016 | 28.8 | 593 | 46.1 | 89.4 |
| % change | -9 | -19 | -17 | +1 |
Ex-div: 28 Jul Payment: 23 Sep | ||||
