SSE warms investors with dividend forecast

Ian Marchant is set to leave Perth-based SSE this July
Ian Marchant is set to leave Perth-based SSE this July
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Scottish Hydro-owner SSE cheered investors yesterday with the offer of an inflation-busting dividend hike.

The Perth-based company said it expects to see its full-year profits rise by up to 5 per cent in the current year, while its dividend should rise by “at least” 2 per cent above the rate of inflation, to about 84p per share.

It said it lost some 90,000 electricity and gas customers in the nine months to December but consumption was higher because the weather was colder than in the same period in 2011.

Chief executive Ian Marchant, who last week announced his intention to leave the firm, said SSE’s attention to operational matters had allowed it to grow despite a difficult backdrop.

He said: “This financial year has been characterised by continuing economic uncertainty and challenging energy market conditions which have affected energy customers and electricity producers alike.

“SSE’s balanced model of market-based and economically-regulated businesses and strategy of focusing on operations and investments in these businesses is again proving to be robust.”

Marchant will be succeeded in July by deputy chief executive Alistair Phillips-Davies.

SSE expects to report that all three of its business “segments” – networks, retail and wholesale – have been profitable in the year to 31 March.

It said that profit margins in its energy supply retail operations will be higher than the 3.5 per cent reported in the previous year.