Aborted billing system upgrade hits SSE retail profits

Paterniano Del Favero
Mag 19, 2017

It said: "While any loss of customers is disappointing, this represents the smallest decline in SSE's customer numbers since 2013, due to the impact of efforts to improve retention and attract more new customers to SSE".

The full-year dividend increased 2.1 percent to 91.3 pence a share.

It said 4.76 million of its 6.76 million customers could be affected by the cap and warned that it may have "unintended consequences". Shares rose 1% to 1465p.

Profit margin per dual fuel household customer - a key measure in the industry - was around 6.9% compared with 6.2% the previous year. Standard prices tend to be higher than fixed-rate deals, so companies with a greater proportion of customers on SVTs are able to make bigger profits through the energy cycle.

The firm said it was working to keep its dividend cover within an expected range of 1.2-1.4 times, although it was likely to be at the bottom of that range, which meant adjusted earnings per share was likely to be lower than 2016/17.

Adjusted earnings per share rose 5.2 percent to 125.7 pence.

Breaking down the adjusted operating profit, the result from the Networks division was broadly flat year-on-year at GBP936.5 million from GBP926.6 million, Retail dipped to GBP422.3 million from GBP455.2 million and the Wholesale division experienced a lift to GBP514.6 million from GBP442.5 million.

Reported operating profit for the division was £313.2m - £85.7m lower than in 2016 - while on an adjusted basis the figure was £9.4m lower at £389.5m. Its total energy customer accounts in Britain and Ireland fell to 8 million compared to 8.21 million a year earlier.

SSE hikes full year dividend.

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Some 70% of its 6.76 million United Kingdom domestic customer accounts could be affected by a cap, it said.

It said: 'SSE would however continue to caution against the unintended consequences of intervention in what is a competitive, dynamic and fast changing market.

"We have been clear for some time that 2017/18 presents challenges, and the need to engage constructively with a new United Kingdom government as it takes forward energy policy will be a key priority for the year ahead and beyond", said Chief Executive Alistair Phillips-Davies.

Net debt exceeded SSE's expectations in the recently-ended financial year, coming in at GBP8.50 billion, a decrease from GBP9.00 billion the prior year, and below the company's estimate of GBP8.60 billion.

It said in a statement: "As a major energy supplier we believe customers" best interests is served by competition, not caps.

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