Utility stock SSE looks set to remain a favourite of income investors as it reaffirmed its intention to increase its full year dividend by at least a couple of percentage points above the year-on-year change in the UK Retail Price Index (RPI).
To save you doing the maths, SSE said that would indicate a full year dividend of around 80p, up from the 75p paid in respect of the year to March 31st, 2011. Market consensus is for a divi this year of 79.42p.
The group said it expects to deliver an increase in adjusted profit before tax for the current financial year of a level similar to that achieved in each of the last three years. Market consensus is for a figure of £1.28bn.
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SSE's capital and investment expenditure for fiscal 2011/12 is forecast to be around £1.7bn.
The group said that its household customers electricity consumption fell by around 7% in 2011/12 while gas use dropped off by around 19%, compared with 2010/11. For both fuels, the weather-adjusted reduction in consumption is estimated to be 4%.
SSE implemented a cut of 4.5% in its unit price for household gas on 26th March 2012 and will not implement any increase in household electricity and gas prices before October 2012 at the earliest.
"The economic uncertainty and the challenges of global energy markets that have characterised recent years look set to continue for some time," warned Ian Marchant, Chief Executive of SSE.
The group is set to announce its full year results on May 16th and when it does, it will adopt a new reporting format, using three core segments: Networks; Retail; Wholesale.
The Networks part of the financial statements will comprise four reported segments: Electricity Distribution (including Connections); Electricity Transmission; Gas Distribution; Other Networks (id est Telecoms, Utility Solutions and Lighting Services).
The Retail part of the financial statements will comprise two reported segments: Energy Supply and Energy Services (i.e. Contracting, Metering and Home Services)
The Wholesale part of the financial statements will comprise three reported segments: Electricity Generation and Energy Portfolio Management; Gas Storage; Gas Production.
To aid comparability, SSE's results for 2010/11 will be re-stated using the new approach.
These reporting changes are designed to provide further financial transparency in respect of SSE's business activities and are consistent with emerging regulatory and accounting requirements, the group said.
"In particular, they are consistent with SSE's continuing work to build customers' trust in energy supply, where there will now be separate reporting of profit in the supply of electricity and gas. We hope that this will help customers to assess the overall fairness of the price they pay for their energy," said Gregor Alexander, Finance Director of SSE.
JH
