Interim Management Statement

Scottish & Southern Energy PLC 05 March 2007 SCOTTISH AND SOUTHERN ENERGY PLC INTERIM MANAGEMENT STATEMENT AND DIVIDEND POLICY Scottish and Southern Energy plc ('SSE') has completed a review of its dividend targets for the period until 31 March 2010 and will set out the details in a presentation to investors and analysts at the Edison Electrical Institute International Utility Conference which begins in London today. As part of the new targets, the Board expects to recommend to shareholders a final dividend of 39.9p per share in respect of the year ending 31 March 2007, compared with 32.7p in the 2005/06 financial year, an increase of 22%. This will make a full year dividend of 55p, compared with 46.5p last year, an increase of 18.3%. This increase is also designed to provide a significantly higher base for future dividend growth. From this new, higher base, SSE's target will be to deliver at least 4% real growth in the dividend paid to shareholders in respect of 2007/ 08,2008/09 and 2009/10. Thereafter, SSE expects to continue to deliver at least sustained real growth in the dividend. This new policy replaces SSE's existing dividend targets, which were to deliver at least 4% real growth in the dividend payable to shareholders in respect of 2006/07 and 2007/08, with sustained real growth thereafter. The review has taken place as SSE nears the end of the second year of the five-year Distribution Price Control period. A similar review took place at the same point in the previous five-year Distribution Price Control period, in 2002. The expected full-year dividend in respect of 2006/07, of 55p, compares with 32.4p for 2001/02, since when the dividend will have increased by 69.8%, which represents a compound annual growth rate of 11.2%. It will also be double the dividend paid by SSE to shareholders for the financial year ending 31 March 2000. In 2007/08 and subsequently, it is expected that the final dividend will represent around two thirds of the total annual dividend paid and the interim dividend around one third. SSE will also tell investors and analysts that it has now achieved over 7.7 million energy supply-related customers - an increase of 200,000 since its interim results in November 2006 and of one million since the start of the current financial year on 1 April 2006. SSE expects to report on 31 May preliminary results for 2006/07 which are in line with the current consensus of brokers' forecasts. Sir Robert Smith, Chairman of SSE, said: 'Our decision to step up our dividend targets follows our analysis of the performance of, and prospects for, the business. That analysis has confirmed that SSE is in an excellent position to deliver very good results in the years ahead and our enhanced dividend policy reflects this.' Ian Marchant, Chief Executive of SSE, will tell delegates at the International Utility Conference: 'SSE's strategy is to deliver sustained real growth in the dividend payable to shareholders through the efficient operation of, and investment in, a balanced range of regulated and non-regulated energy-related businesses. 'This strategy has continued to be successfully implemented in 2006/07, with key operational successes including the achievement of over 7.7 million energy supply customers. This continuing growth in customer numbers clearly follows our commitment to responsible energy pricing - again demonstrated by the price cuts which we started to implement last week - and to sector-leading customer service. We have also significantly improved power station availability during this year, and made good progress with our investments in electricity generation at Glendoe, Ferrybridge, Fiddler's Ferry and Marchwood. 'This good progress is being matched in our other major investments in electricity networks and gas storage, with the first new capacity at Aldbrough on course to be commissioned later this year. 'Our electrical Contracting business has continued to perform well and our Connections business has also continued to develop, with the recent commissioning of the out-of-area electricity network for Francis Flower in Runcorn. 'As our major investment programme bears fruit, our asset base in energy networks, electricity generation, energy supply and gas storage, which has grown substantially in recent years, will again increase significantly in the coming years. 'This growth in assets will continue to be allied to ongoing improvements in operational performance, which remains central to our future business development. We will also continue to examine other opportunities for growth, although the achievement of our new dividend growth targets is not dependent on them. 'SSE's core objective is the delivery of sustained real growth in the dividend, and today's announcement means we will have doubled the dividend in just seven years. With the company approaching the tenth anniversary of its formation, at the end of next year, our new targets set the scene for the achievement of more than a decade of sustained real growth in the dividend.' Enquiries to: Scottish and Southern Energy plc Alan Young - Director of Corporate Communications + 44 (0)870 900 0410 Sally Fairbairn - Investor Relations Manager + 44 (0)870 900 0410 Financial Dynamics Andrew Dowler + 44 (0)20 7831 3113 This information is provided by RNS The company news service from the London Stock Exchange ND IMSUUUAAWUPMGQC

Companies

SSE (SSE)
UK 100

Latest directors dealings