SSE vows to 'expand and diversify' as it builds on 'enviable' offshore wind pipeline
The group, which is a widely held stock among private investors, has also reiterated its commitment to a five-year dividend plan to March 2023.
In a trading update to coincide with its annual shareholder meeting, the firm flagged good progress on its disposals programme which is on course to realise more than £2 billion from the sale of non-core assets and businesses that are “not a good fit with SSE’s net zero strategy”.
The sale of the firm’s contracting business to Aurelius, first announced at the start of April, was successfully completed on June 30.
As reported in May, SSE has initiated a sale process for its stake in gas network SGN, targeting an agreed sale by the end of 2021.
Bosses noted that construction continued to progress on major projects in transmission and renewables. These include building the world’s largest offshore wind farm at Dogger Bank, Scotland’s biggest offshore wind farm at Seagreen and “one of Europe’s most productive onshore wind farms” at Viking on Shetland.
The group added: “Looking further ahead, SSE is seeking to add to its considerable pipeline in renewables and has submitted bids, with its partners Marubeni and CIP, for a number of sites through the ScotWind seabed leasing process.”
The recent ScotWind leasing round has been hailed a success, attracting more than 70 bids for offshore projects.
Gregor Alexander, SSE’s finance director, told investors: “We have delivered on our purpose through the coronavirus pandemic and are continuing to progress growth opportunities and options arising from our net zero strategy.
“We have an enviable offshore wind pipeline which we are seeking to expand and diversify.
“This represents an exciting future for SSE, and we look forward to updating the market on our capital expenditure and investment plans at our interim results in November.
“In the meantime, our focus remains on strategic delivery across the group, in doing so creating sustainable value for shareholders and society.”
Stuart Lamont, investment manager at Brewin Dolphin, said: “SSE’s dividend is a vital part of the investment case for the company, and it has reiterated its commitment to RPI-linked increases until 2023.
“There is, however, a case to be made that some of the capital could be re-directed after this date towards investment in the changing energy environment. That said, SSE’s disposal programme has strengthened its balance sheet, simplified the business, and focused it more on the transition to net zero.”
Nicholas Hyett, equity analyst at financial services group Hargreaves Lansdown, noted: “SSE’s renewable output is some 19 per cent below target for the three months to the end of June.
“Unfortunately that sort of thing is an inevitable consequence of relying on the, never reliable, British weather for as much as a third of the group’s total output.
“SSE will hope unexpectedly windy and wet conditions later in the year mean it all falls out in the wash.”
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions
Want to join the conversation? Please or to comment on this article.