Ian Marchant unveiled his last set of results as chief executive of energy utility SSE (SSE), which beat guidance and rewarded investors with a dividend increase 2 per cent above inflation, the 14th consecutive year the payout has risen. Adjusted pre-tax profits were up 5.6 per cent to £1.41bn, after adjusting for £585m in exceptional items related to asset write-downs, and a further £201m loss on derivatives used to hedge commodity and interest rate exposure.
The exceptional costs related to mothballing unprofitable gas generation assets that are suffering from high wholesale gas prices, and low power prices, compressing margins. The wholesale energy division also felt the pain; profits fell 16 per cent to £509m as output from gas-fired stations fell by 60 per cent. However, this was more than offset by a 19 per cent increase in the network profits to £876m, driven by a higher contribution from electricity distribution. Capital investment increased the value of network assets by 8.1 per cent to over £6.3bn.
SSE's retail operations saw customer numbers fall by 80,000 to 9.47m, although operating profits soared 27 per cent to £410m as gas and electricity usage increased by 21 per cent and 5 per cent, respectively, during a colder year.
Deutsche Bank expects current year adjusted pre-tax profits of £1.35bn and EPS of 109p (from £1.41bn and 118p in 2013).
SCOTTISH & SOUTHERN ENERGY (SSE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,684p | MARKET VALUE: | £16.2bn | |
| TOUCH: | 1,683-1,684p | 12-MONTH HIGH: | 1,690p | LOW: 1,286p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 349p* | NET DEBT: | 132% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 25.4 | 0.05 | 13 | 66.0 |
| 2010 | 21.6 | 1.64 | 134 | 70.0 |
| 2011 | 28.3 | 2.11 | 162 | 75.0 |
| 2012 | 31.7 | 0.27 | 21 | 80.1 |
| 2013 | 28.3 | 0.60 | 45 | 84.2 |
| % change | -11 | +122 | +112 | +5 |
Ex-div: 31 Jul Payment: 27 Sep *Includes intangible assets of £918m, or 95p a share | ||||
