The FTSE-100 group plans to invest around £2 billion largely in low carbon power projects this year and said it was weighing up further investments ahead of the COP26 conference in Glasgow. It has created more than 1,000 jobs during the pandemic and expects to build on this number in the current financial year.
Profit for the year to March 31 edged up as the group continued its transformation away from energy supply to the production of green electricity.
Adjusted operating profit sparked up 1 per cent to just over £1.5 billion, despite a £170 million hit from the pandemic. That hit was towards the lower end of what SSE had previously guided investors to expect.
It comes a little over a year since the group sold its retail arm to Ovo Energy, getting it out of the business of selling gas and electricity to households.
Bosses said they expect to exceed the target of trebling renewable output by 2030. They pointed towards international wind power, carbon capture and storage, and hydrogen as some of the areas that the company could grow.
A £7.5bn programme of capital expenditure is on track, the group added, with construction well under way at flagship SSE Renewables projects including Seagreen, Viking and the world’s largest offshore wind farm at Dogger Bank in the North Sea.
Chairman Sir John Manzoni said: “Thanks to the commitment of employees right across the business in 2020/21 we made an important contribution to the national pandemic response, delivering strong operational performance, and making significant strategic progress.
“We have also made significant progress on our non-core disposals programme, creating value for shareholders while continuing to sharpen the group’s strategic focus on its low-carbon electricity core in networks and renewables, where our capital investment programme is progressing well.”
The firm is to recommend a final dividend of 56.6p per share, marking an average annual RPI (inflation) rate of 1.2 per cent and leading to a full-year dividend of 81p.
Hargreaves Lansdown analyst William Ryder said that SSE is still reliant on its legacy businesses to help fund the energy transition and continue to pay a solid dividend.
“SSE is continuing its drive to become a renewable energy giant, and combining electricity distribution networks with renewable generation continues to look like a shrewd strategy,” Ryder said.
“At the moment the group is investing heavily, and continual portfolio shuffling obscures some underlying trends, but the group looks to be at the forefront of an important trend towards renewables.
“If execution continues to be up to standard, a very attractive utility could emerge in the years ahead.”
John Moore, senior investment manager at Brewin Dolphin, noted: “SSE has been re-shaping its business in recent years, positioning itself flexibly within renewable energy and strengthening its balance sheet with the disposal of non-core assets.
“While investors may be pleased to see the RPI-linked increase and have the certainty of a dividend path until 2023, there is an argument that SSE should be paying a lower dividend after this date and investing more to benefit from the changing energy environment.”