SSE pledges to raise dividends as profits soar

SSE has defended nine per cent price hikes. Picture: PA
SSE has defended nine per cent price hikes. Picture: PA
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ENERGY giant SSE has told investors that it is confident of continuing to deliver inflation-busting dividend growth after reporting a 38 per cent jump in first-half profits.

The group, which trades as Scottish Hydro, Southern Electric and Swalec, announced an interim dividend of 25.2p per share, an increase of 5 per cent over last year’s payout, as it unveiled an adjusted pre-tax profit of £397.5 million for the six months to 30 September.

Chairman Lord Smith of Kelvin said the UK’s second-largest electricity generator was targeting a full-year dividend of around 84p, up from 80.1p last time, “and annual increases that are above retail prices inflation in the following years”.

Perth-based SSE’s retail arm, which recently raised prices by an average of 9 per cent, delivered a first-half operating profit of £75.7m, compared with a loss of £101.4m a year ago. Household gas consumption soared 27.9 per cent and electricity use rose 2.8 per cent.

Capital spending fell from almost £800m a year ago to £700m, of which £110m was spent on work to replace SSE’s section of the 130-mile electricity line between Beauly and Denny. Meanwhile, spending on renewables is expected to account for just 30 per cent of its total bill in the three years to 2015, down from 50 per cent over the past three years.

SSE is looking to add to its upstream gas assets after spending £33m to raise its stake in three North Sea gas fields – Apollo, Mercury and Minerva – to 50 per cent. Perenco will own the remaining interest and act as operator.