SSE dividends on track despite green output blow for Scottish power giant

SSE, the Perth-based power provider, said its finances and dividend policy remained on track despite its renewable output falling shy of its forecasts.

Part of the Gordonbush onshore wind farm. Picture: Contributed

Output from the group’s wind farms and hydro-electric schemes was just over 5 per cent behind plan during the first nine months of the financial year, according to its third-quarter trading statement.

The FTSE-100 group said it continued to expect its adjusted earnings per share (EPS) for the full year to be in the range of 83p to 88p, “subject to hydro and wind assets benefiting from normal weather conditions”.

Bosses said they were committed to the dividend plan for the five years to March 2023 and, in line with that, expected to recommend a dividend of 80p per share for the 2019/2020 financial year.

Finance director Gregor Alexander said: “Since reporting our interim results we have continued to deliver on our priorities, focusing the SSE group on businesses that are well placed to play a leading role in delivery of a low-carbon strategy that supports the transition to net zero emissions.

“The first financial objective of that strategy is to remunerate shareholders’ investment through dividends based on the quality and nature of assets and operations, earnings derived from them and the long-term financial outlook.

“The first nine months of the financial year have been generally positive for SSE, and we are on course to deliver our [full-year] 2019/20 financial forecasts.”

Committed

John Moore, senior investment manager at Brewin Dolphin, said: “While the recent trading environment for utility companies has been difficult, SSE seems to be in relatively good shape with management committed to its dividend plan and earnings per share expected to be within target range.”

The update come just two weeks after Ovo Energy said it had completed its transformational takeover of the household energy arm of SSE, propelling it into the top flight of UK power suppliers.

That move followed December’s clearance for the deal from the UK competition watchdog after officials said they would not launch a second-phase investigation into the landmark £500 million acquisition.

Britain’s traditional Big Six energy providers have been facing increased pressure from challenger suppliers such as Ovo in recent years.

After encouragement from the regulator, dozens of new energy companies set up, often offering more attractive deals than the slow-moving incumbents, though several have since gone to the wall.

The deal sees SSE, formerly Scottish & Southern Energy, hold onto its electricity generation arm and grid operations.

Meanwhile, Scotland's newest onshore wind farm will be built subsidy free after SSE Renewables confirmed an 11-turbine extension to the existing 70-megawatt, 35-turbine Gordonbush onshore wind farm.

Located north west of Brora in the Scottish Highlands, construction on the extension will commence in March using some of the infrastructure and the grid connection of the original Gordonbush wind farm.