SSE (SSE) did not disappoint income-hungry investors, confirming a full-year dividend of 80p a share and announcing plans to declare an interim dividend of 24.4p in November. That is despite expectations of £150m- £200m coronavirus-related hit to operating profits this year from rising bad debts among business customers. The customer-facing business has already felt some of the effects of unpaid bills, which resulted in operating profits declining more than a third for that division last year.
The energy giant’s plan to defend 2021 dividend payments includes generating at least £2bn from disposals by autumn and reducing annual capital expenditure by £250m, with less advanced projects being deferred. Nevertheless, the group has ploughed on with its core renewable investment plans, which increased again last year and accounted for just over a quarter of total spend. Management has also decided to press ahead with the construction of the 443 megawatt Viking wind farm, which will be the UK’s largest onshore wind farm and cost £580m to construct.
Consensus forecast EPS for the year to March 2021 is 80.96p, rising to 81.53p the following year.
| SSE (SSE) | ||||
| ORD PRICE: | 1,381p | MARKET VALUE: | £ 13.9bn | |
| TOUCH: | 1,380-1,381p | 12-MONTH HIGH: | 1,703p | LOW: 1,058p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 374p* | NET DEBT: | £10.5bn** | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 28.8 | 0.59 | 46.1 | 89.4 |
| 2017 | 29.0 | 1.78 | 158 | 91.3 |
| 2018 | 27.3 | 0.86 | 64.3 | 94.7 |
| 2019 (restated) | 7.30 | 1.30 | 124 | 97.5 |
| 2020 | 6.80 | 0.59 | 40.6 | 80.0 |
| % change | -7 | -55 | -67 | -18 |
| Ex-div: | 23 Jul | |||
| Payment: | 18 Sep | |||
| *Includes intangible assets of £1.6bn, or 160p a share **Includes lease liabilities of £455m | ||||
