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Annual Results

SSE lifts FY adj. pretax profit, dividend

17 May 2017 07:16

SSE has lifted its reported FY pretax profit to £1.78bn for the year, from £593.3m in 2015/16, due to the movement in non-recurring exceptional items, and reiterated the challenges it faces in FY 2017/18.

It said the reported results for 2016/17 were significantly higher than those for 2015/16 due to the impact on reported profit before tax of the significant exceptional charges incurred in 2015/16.

"These related mainly to the write down of wholesale generation, gas storage and production assets in 2015/16 compared to the gain on sale of a stake in SGN plus lower asset write downs in 2016/17," said SSE.

This, together with the relative movement in mark to market valuations on forward purchase contracts for commodities over both years, contributed to a net reported gain before tax of £247.5m in 2016/17, versus a loss before tax on those items of £904.3m in 2015/16.

The company recommended a FY dividend up 2.1% to 91.3p a share, and this was covered 1.38 times.

However, looking ahead, CEO Alistair Phillips-Davies said SSE had been clear for some time that 2017/18 presented challenges, and the need to engage constructively with a new UK government as it took forward energy policy would be a key priority for the year ahead and beyond.

"SSE will continue to focus on securing maximum value from our portfolio of Wholesale assets, achieving further efficiencies and customer service improvements in our Networks businesses, responding positively to evolution and change in our Retail markets and creating long-term value through investment of around £1.7bn in new assets in 2017/18," he said.

"Across the SSE group, we will continue to take the decisions necessary to secure the right outcomes for customers and investors.

"With a strong and growing asset base, and significant index-linked revenues, we remain committed to delivering annual dividend growth that at least keeps pace with inflation, and to working towards ensuring that dividend cover remains within the expected range."

Looking to 2017/18, SSE said it was targeting an annual increase in the FY dividend at least equal to RPI inflation with cover of about 1.2-1.4 times.

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