SSE says energy transition 'gathering pace' as it pumps in further £2.5 billion
The Perth-headquartered group said it was now expecting to make £20.5bn of investment by 2027 under an existing fully funded, five-year programme, compared to £18bn previously. Bosses said SSE had positioned itself at the “heart of the clean energy transition” with one of the largest investment programmes in the FTSE-100.
During the first six months of its current financial year, the firm undertook capital expenditure amounting to £1.1bn, including achieving first power at Dogger Bank, which when complete will be the world’s largest offshore wind farm capable of powering some six million UK homes. It also completed full operational delivery of Seagreen, Scotland’s largest offshore wind farm and the deepest tethered in the world, capable of powering up to 1.6 million homes.
For the first-half, adjusted profit before tax nudged up 1 per cent to £565.2 million, though adjusted earnings per share fell 11 per cent to 37p, reflecting the seasonal nature of the group’s operations that deliver the majority of annual earnings during the second half.
Chief executive Alistair Phillips-Davies said: “Our first half performance reflects both the financial strength of our business and our ability to deliver world-class projects that are at the heart of the clean energy transition. There remains strong underlying political consensus on the big drivers of energy security and decarbonisation – accelerating renewables, network investment and flexible power generation – and these are the growth engines powering SSE.
“That we are investing more than £20bn over the five years to 2027 and could invest more than £40bn over the decade to 2032, speaks to the range and quality of opportunities we have, underpinned by an energy transition that is gathering pace, and our continued commitment to creating value for society and shareholders in a disciplined way.”
The group reiterated its earnings per share growth forecast which is expected to deliver 13 per cent to 16 per cent average earnings growth per annum over the five years to 2026/27.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “SSE has delivered yet another robust set of results. Its earnings per share are ahead of expectations and the renewables group has reaffirmed its guidance for the rest of the year. SSE is in a sweet spot in terms of the UK’s transition to net zero, with plenty of investment opportunities in front of it – but the company has been discerning about where to allocate capital when it needs to be.”
Mark Crouch, an analyst at trading and investment platform eToro, added: “There has been some suggestion of pushback from the UK government in recent months on the net zero agenda, but investors should have little concern that SSE will see its plan upturned. The direction of travel on energy resources remains in place, especially with the geopolitical importance of energy security still looming large in the background.”
Want to join the conversation? Please or to comment on this article.