Profit caution and price rise hints combine to send SSE shares lower

Published on Thursday 24 July 2008 21:32

SCOTS STOCKS

SCOTTISH & Southern Energy came under pressure yesterday after warning of first-half profits "substantially lower" than last year and hinting of retail price hikes to come.

Shares in the Perth-based utility slumped 55p, or 3.8 per cent, to 1,390p as the firm told investors that profits in the six months to 30 September would be lower, adding that the majority of its profits would be made between October and March – a clear signal that price hikes are on the way.

Credit Suisse analysts said in a note: "A combination of high increases in commodity prices, plant performance and uncertainty over the range of expected tariff increases by competitors mean that the second half of 2008-9 could be more challenging than the same period last year."

Meanwhile, British Energy surged 6.2 per cent to 728.5p after the nuclear power generator confirmed it was in "advanced" takeover discussions, understood to be with French group EDF. East Kilbride-based British Energy has been on the auction block for several months.

Shares in Dana Petroleum fell 4.6 per cent to 1,465p despite a successful annual meeting at which all resolutions were approved by shareholders. The firm told investors: "Dana is in a very healthy position with a high calibre portfolio."