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(Alliance News) - SSE PLC on Wednesday reported a sharp rise in annual profit, thanks to high oil and gas prices, and said it is on track to hit its strategic capital investment target.
Shares in the FTSE 100-listed Perth, Scotland-based electricity provider were 4.6% higher in London on Wednesday morning at 1,843.00 pence each.
In the financial year that ended March 31, revenue climbed 42% to GBP16.91 billion from GBP11.87 billion. Pretax profit rose 44% to GBP3.48 billion from GBP2.42 billion.
Operating profit jumped 41% to GBP3.76 billion from GBP2.65 billion.
Adjusted earnings per share grew by 22% to 95.4 pence, within guidance, from 78.4p.
The adjusted EPS figure has been tipped to rise to "at least" 120p for the new year. For the five-year period to financial 2026, it expects compound annual adjusted EPS growth of between 7% and 10%.
"This was a year in which our resilient business mix and balanced portfolio of assets helped us navigate volatile markets and meet our financial objectives whilst making record investments in the critical UK infrastructure needed to tackle climate change and deliver more secure, independent energy supplies," Chief Executive Alistair Phillips Davies said.
Total generation output at all of its plants fell to 23,792 gigawatt hours from 28,287 the year before. Thermal generation was down to 14,265 GWh from 18,008, and Renewable generation dropped to 9,423 GWh from 10,171.
SSE hiked its payout by 5.8% to 85.7p from 81.0p.
Davies continued: "We set out in November our 'net zero acceleration programme', which acts as a floor, not a ceiling, to our ambitions and we are delivering on that plan at pace.
"In the context of a global energy crisis and intense pressure on the cost of living, we are helping to drive the build-out of vital electricity infrastructure that will reduce dependency on imported gas and help protect consumers from future price spikes, and in doing so we are investing significantly more than we are making in profits."
SSE recently kicked off plans for a sales process for its SSEN Transmission arm. This is expected to formally begin in the summer. SSE plans to sell a 25% stake in the electricity transmission network unit.
"We are delivering major projects, building pipelines, and have made inroads in Southern Europe and Japan as we export our renewables capabilities internationally to fulfil SSE's considerable potential. Strategically, operationally and financially, SSE is well-placed to continue to create value for all of our stakeholders and wider society as we create the infrastructure needed to deliver net zero, secure energy supplies and ultimately drive consumer prices down," Davies added.
The utility said it expects to continue high levels of investment in its Transmission unit, while anticipates a step up in earnings in Thermal generation. It also sees an expected return to normal weather for its Renewables unit.
"The group is confident about delivering strong earnings growth for this financial year," it added.
SSE said it is on track to complete GBP12.5 billion in strategic capital investment by financial 2026.
Separately, it also announced it has hired John Bason as a non-executive director, effective June 1. He previously served a decade on caterer Compass Group PLC's board.
"These results...highlighted the continued success of the group's investment strategy, with net investment into Ireland and the UK infrastructure potentially exceeding GBP25 billion over the next decade and the company's GBP12.5 billion strategic capital investment plan for FY26 on track," commented Neil Shah, director of Research at Edison.
However Shah noted that SSE faces calls for the UK government to impose a windfall profit tax on power companies. "Amidst both macroeconomic uncertainty and this potential legislative scrutiny, SSE faces a difficult year ahead," he said.
By Paul McGowan; paulmcgowan@alliancenews.com
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