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SSE plc
Interim results for the six months to 30 September 2016
9 November 2016
This report sets out the interim results for SSE plc for the six months to 30 September 2016. It
includes updates on operations and investments in its Wholesale, Networks and Retail (including
Enterprise) businesses. As performance over a six month period can be variable, SSE focuses on
results for the financial year as a whole, and manages its costs and its energy portfolio accordingly.
Overview
For the six months to 30 September 2016 SSE’s financial highlights are as follows (comparison with
the same period in 2015 in brackets):
Interim dividend increased by 1.9% to 27.4 pence per share
Adjusted earnings per share fell by 25.5% to 34.2 pence, reflecting lower profits in Wholesale
and Retail and an unusually high proportion of hybrid bond coupon payments made in the first
half of the financial year
Adjusted profit before tax declined by 13.3% to £475.8m, but is the second highest H1 profit
before tax delivered by SSE
Reported earnings per share increased 143% to 47.2p reflecting the cumulative impact of
positive mark-to-market valuations on commodity and financial derivatives
Reported profit before tax increased by 167% to £615.9m also reflecting the cumulative impact
of positive mark-to-market valuations on commodity and financial derivatives
Investment and capital expenditure rose 3.3% to £782.4m
Adjusted net debt and hybrid capital increased by 7.2% in the half year to £8,995.4m as a result
of the phasing of capital expenditure and movements in foreign exchange rates.
For the financial year 2016/17 as a whole, SSE expects to:
Deliver an annual increase in the dividend that at least keeps pace with RPI inflation and which is
covered in the range from around 1.2 times to around 1.4 times
Achieve a return to growth and deliver adjusted earnings per share of at least 120 pence
Undertake capital and investment expenditure of around £1.85bn, which would be the highest
annual investment and capital expenditure by the company to date, following the decision to
invest in the 225MW Stronelairg onshore wind farm – a decision which means SSE has 1GW of
wind farm capacity in construction or pre-construction.
In the period to December 2017, SSE intends to:
Use the proceeds from the sale of part of its stake in SGN (around £600m, net of transaction
costs) to create value for shareholders by directing around £100m to support investment in
Stronelairg and currently intends to return value to shareholders by way of an on-market share
buy-back of around £500m. Thereafter, the ongoing adjusted EPS impact of the sale and the use
of the proceeds should be broadly neutral.
Looking further ahead, SSE remains on course to:
Deliver annual dividend increases that keep pace with RPI inflation
Achieve dividend cover within a range of around 1.2 times to 1.4 times over the three years to
March 2019
Undertake capital and investment expenditure totalling almost £6bn over the four years to
March 2020.
Adjusted profit before tax describes profit before tax before exceptional items and re-measurements arising from IAS 39, excluding
interest costs on net pension scheme liabilities and after the removal of taxation on profits from joint ventures and associates.
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