Energy group SSE (SSE) reported adjusted pre-tax profit down 26% to £193.9 million for the half-year ended 30 September impacted by Covid-19, but remains on target to deliver against disposal and renewable investment programmes. The shares rallied 3% to £13.89.
GOOD STRATEGIC PROGRESS
SSE has made good progress on its strategic plans, delivering £1.4 billion of its £2 billion disposal programme announced in June, making gains of over £900 million.
In terms of its £7.5 billion investment programme the company expects to announce the financial close on the first two phases of the world’s largest offshore wind farm at Dogger Bank in the next few days.
The medium-term goal is to treble renewable output by 2030 with a ‘clear aspiration’ to reach a run-rate of at least 1GW of new assets a year during the second half of the current decade.
DIVIDEND CONFIRMED
SSE will pay an interim dividend of 24.4p per share and has committed to paying a full-year pay-out of 80p per share plus RPI (retail price inflation) inflation. It will continue to target RPI increases in the two subsequent years as set out in its 2023 plan.
The company is raising over £2 billion in hybrid capital and Eurobonds which will leave the group without any refinancing or funding requirements for the next two-years.
Hybrid bonds are financial instruments that have equity and debt like features with more flexible payment terms.
POSITIVE OUTLOOK
Full-year coronavirus-related impacts on operating profits are expected to be in the middle of the £150 million-to-£250 million range set out in June.
Adjusted earnings per share assuming normal weather patterns are expected to be in the range of 75p to 85p.
Adjusted net debt is expected to be around £9.5 billion at 31 March 2021, while the company will continue to target a net debt to EBITDA (earnings before interest, taxes, depreciation and amortisastion) ratio at the lower end of a 4.5-to-5 times range between 2021/22 and 2024/25.
