Notification of Close Period

RNS Number : 7501S

SSE PLC

29 September 2014

 



SSE plc

NOTIFICATION OF CLOSE PERIOD 

SSE plc will enter its close period on Wednesday 1 October 2014, prior to the publication on Wednesday 12 November of its financial results for the six months to 30 September 2014. 

Since the publication of its Interim Management Statement (IMS) on 17 July 2014 SSE has:

·     issued its initial response to the electricity distribution price control settlement proposed by Ofgem;

·     completed the acquisition of the Energy Solutions Group, a Manchester-based provider of energy management solutions;

·     submitted its response to the Statement of Issues relating to the supply and acquisition of energy in Great Britain published by the Competition and Markets Authority;

·     reduced cash funding requirement for the final 2014 dividend by almost £174m through shareholders' subscription to the Scrip Dividend Scheme;

·     completed the sale of SSE Pipelines Ltd to the Environmental Capital Fund for £53m, in line with the value programme announced in March 2014;

·     submitted a pre-qualification application for the electricity capacity market auction that is scheduled to take place in December 2014 for delivery in 2018/19;

·     generated electricity for the first time at the new 460MW combined cycle gas turbine power station nearing completion at Great Island, Co Wexford.  The station itself is now expected to be in full commercial operation around the end of the financial year; and

·     appointed Sally Fairbairn to be Company Secretary, in succession to Vincent Donnelly, who is stepping down later this year.  She will retain her existing responsibilities for investor relations.

SSE expects to report that it has invested around £700m during the six months to September 2014 in maintaining, upgrading and building the energy assets that its customers depend on.

Ferrybridge power station

SSE is continuing to manage the impact of the serious fire that occurred in Unit 4 at its Ferrybridge power station on 31 July and which also affected Unit 3.  As SSE stated on that date, this has added to an already challenging business environment.  SSE currently does not expect Unit 4 to return to service in this financial year; Unit 3 is still not expected to return to service before 1 November.

Scotland

Following the referendum on 18 September, SSE will continue to work constructively with the UK and Scottish governments on all relevant areas of public policy, including the expected redistribution of powers.

Enterprise division

As stated in its preliminary results statement on 21 May, a number of businesses have been brought together under new leadership as part of an 'Enterprise' division within the SSE group.  The objective of this division is to bring together SSE's services in competitive markets for industrial and commercial customers so that the energy and related needs of these customers can be better met through an integrated approach.  These services include electrical contracting, utility solutions, lighting services, telecoms capacity and bandwidth and the Energy Solutions Group.

As a result of this change in the way these businesses are managed and monitored, activities previously reported under 'Other Networks' will be combined with electrical contracting, previously reported under 'Energy-related Services', to create an 'Enterprise' segment which, as customer-facing businesses in competitive markets, will, in turn, be reported under 'Retail'.  In 2013/14, this Enterprise segment delivered operating profit of £56.8m, including £27.8m in the six months to 30 September 2013.  The remaining part of the 'Energy-related Services' segment (metering and home services), which will also continue to be reported under 'Retail', delivered operating profit of £24.1m in 2013/14, including £16.2m in the six months to 30 September 2013 (see footnote).

Financial outlook

SSE focuses on results for the financial year as a whole because results for six month periods are more likely to fluctuate, with unusual variations or circumstances.  In its financial results for the six months to 30 September 2014, SSE expects to report that (comparisons with the same six months in 2013):

·     its Retail segment (including Enterprise - see above) has been profitable, although within this its Energy Supply business is expected to have incurred an operating loss, albeit at a reduced level;

·     its Networks segment has earned an increase in operating profit, reflecting in particular the extent of the capital investment incurred in Transmission in recent years; and

·     its Wholesale segment has been profitable, although lower output from renewable and thermal energy sources and a reduction in profits from gas production due to lower day ahead wholesale prices, are expected to contribute to a reduction in operating profit. 

SSE uses adjusted earnings per share (EPS) to monitor financial performance over the medium term because it defines the amount of profit after tax that has been earned for each Ordinary share.  While a greater proportion of annual adjusted EPS is likely to have been earned in the six months to 30 September 2014 than was the case in the previous year, in a challenging business environment, SSE still expects adjusted EPS in 2014/15 as a whole to be around or slightly greater than in 2013/14.

SSE remains on course to achieve its principal financial objective for 2014/15, which is to deliver an increase in the full-year dividend of at least RPI inflation.

Gregor Alexander, Finance Director of SSE, said:

 "We said at the start of the financial year that the issues facing the energy sector are very challenging, and that has proved to be the case.  Energy is a long term business, however, and we are confident that focusing on positive engagement with our Retail and Networks customers, maintaining a strong operational focus and investing in the right assets, is the right approach. 

"The challenges are unlikely to abate in the second half of the financial year but our continuing operational and financial discipline should enable us to meet the needs of customers and provide a fair return to investors."

Footnote:

2013/14 Operating Profit Restated for Enterprise

Adjusted Operating Profit	Restated September 2013 £m		Restated March 2014 £m
Networks
Electricity Distribution	232.0	507.0
Electricity Transmission	67.6	136.7
Gas Distribution	138.2	276.6
	437.8	920.3
Retail
Energy Supply	(115.4)	246.2
Energy Related Services	16.2	24.1
Enterprise *	27.8	56.8
	(71.4)	327.1
Wholesale
Energy Portfolio Management and Electricity Generation	86.2	496.1
Gas Storage	5.2	8.3
Gas Production	69.0	130.2
	160.4	634.6
Corporate unallocated	(8.1)	(1.9)
Total	518.7	1,880.1
*Other Networks	18.0	35.1
Contracting	9.8	21.7
Enterprise	27.8	56.8

 

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