SSE warns of lower retail profit as customers switch

Energy giant SSE has warned that its retail gas and electricity arm will see lower annual earnings after more than 130,000 customers quit the Perth-based group.

SSE's price hike is due to come into force on 28 April. Picture: John Devlin
SSE's price hike is due to come into force on 28 April. Picture: John Devlin

The “big six” provider said profits in the division have also been hit by its price freeze announced last November, which comes to an end next month when it will hike electricity tariffs by 6.9 per cent for dual fuel customers.

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SSE said in January its customer numbers had dropped to 8.08 million from 8.21 million at the end of March 2016, although it added it had begun to halt the exodus.

While it said retail operating profits are set to be “slightly lower” over the year to the end of March, it is expecting higher earnings across its wholesale energy business.

But profits in the networks arm, which handles transmission and distribution of electricity, are expected to be largely flat and SSE warned earnings in this division are set to be around £100 million lower in the next financial year.

Gregor Alexander, finance director of SSE, cautioned over “challenges” ahead.

He said: “The operating environment has presented SSE with a number of complex issues to manage. We can expect additional challenges in the new financial year.”

The group will report annual results on 17 May. Its price rise will take effect on 28 April and will see a typical dual fuel bill cost customers £1,142 a year.

Its tariff hike comes amid a round of similar rises among the major providers, with the likes of Eon, ScottishPower, Npower and EDF all ramping up their bills.

But in better news for hard-up families, Scottish Gas has announced it is to extend a price freeze for customers on its standard energy tariff until August.