SSE plc Preliminary results for the year ended 31 March 2019
SSE plc has today set out its preliminary results for the year ended 31 March 2019 in which its financial performance in 2018/19 is in line with Notification of Close Period Statement on 28 March.
- Final dividend of 68.2 pence, making full-year dividend of 97.5 pence, in line with five-year dividend plan.
- Headline results reflect £284.9m adjusted operating loss previously forecast in Energy Portfolio Management (EPM):
- Adjusted earnings per share* of 67.1 pence, down 32%; and
- Adjusted profit before tax* of £725.7m, down 38%.
- Reported results reflect the EPM loss and the impact of £1,096.9m exceptional gains and fair value uplift from asset sales:
- Reported earnings per share* of 135.2 pence, up 110%; and
- Reported profit before tax* of £1,370.6m, up 59%.
- Adjusted EBITDA# total for the core businesses of Electricity Networks and Renewables was over £1.5bn, 83% of SSE Group* total.
- Value creating disposals in the year delivered:
- over £1bn of cash proceeds;
- £608.4m of exceptional gains on sale; and
- £488.5m of exceptional unrealised fair value uplift (reflecting revaluation of retained stakes).
- Investment and capital expenditure of £1.42bn includes over £1bn investment in regulated electricity networks and renewable energy but excludes £195m investment in assets subsequently divested in the year.
- Adjusted net debt and hybrid capital of £9.39bn.
- Total GDP contribution to UK economy of £8.9bn and to Irish economy of €689m as a result of direct and supply chain activities. This supported an estimated 105,000 jobs across both countries.
Note: percentage comparisons relate to year to 31 March 2018
*Excludes SSE Energy Services, which remains held for disposal
# EBITDA – adjusted earnings before interest, tax, depreciation and amortisation
Delivery against strategic priorities continuing:
- £1bn Caithness-Moray transmission link (SSE’s first major HVDC project) completed on time and below budget, helping take Transmission RAV to over £3.25bn.
- All 84 turbines at the 588MW Beatrice offshore wind farm commissioned, with this £2.6bn project being delivered on time and below budget, (SSE share: 40%).
- Stronelairg onshore wind farm (228MW) completed six months early and on budget.
- Development and operation of renewable energy assets brought together under new SSE Renewables management team as part of wider refocusing of SSE’s businesses.
- New approach to hedging commodity price exposures, outlined in November 2018, on course to be fully in place from 2020/21, with ‘SSE’s Approach to Hedging: May 2019 Update’ published today on sse.com.
- Four business goals for 2030 adopted to tackle climate change and support global goals for sustainable development.
- Disposal of 50% stake in SSE Enterprise Telecoms for up to £380m; process to prepare for disposal of investments in gas production under way.
- Katie Bickerstaffe appointed Executive Chair of SSE Energy Services with mandate to secure the best future for the business outside SSE.
Outlook for 2019/20
- Intention to recommend a full-year dividend of 80 pence per share, in line with five-year dividend plan.
- Adjusted investment and capital expenditure expected to be around £1.5bn, including almost £1.0bn investment in regulated electricity networks and renewable energy.
- Group adjusted operating profit improving but likely to be negatively impacted by expected phasing of profits in regulated Electricity Networks and by Renewable output for 19/20 being hedged at less than current market prices. For more detail see the Group Financial Review section of this statement.
- Share buy back plans include:
- programme of £200m announced in February with share buy backs totalling £50m so far completed at an average market price per share of 1,149p; and
- intention to buy-back shares if Scrip take-up of full year dividend exceeds 20%.
- Adjusted net debt forecast to be around £10bn at 31 March 2020.
Developing key future opportunities for long-term business through low-carbon transition:
- Over 8GW of on- and off-shore wind farm pipeline developments for SSE Renewables in GB and Ireland, capable of doubling renewable energy output to over 20TWh by 2025.
- Powerful case for investment in north of Scotland that could contribute to a Transmission RAV of around £5bn by 2026, up from around £3.3bn at March 2019.
- Opportunity to support the UK’s decarbonisation objectives through evolution to Distributed System Operators, including industry-first smart grid trial in Oxfordshire.
Richard Gillingwater, Chair of SSE, said: “While our financial results clearly fell well short of what we hoped to achieve at the start of the year, we’ve made significant progress towards our ambition to be a leading energy company in a low-carbon world.
"We have continued to develop our core businesses of regulated energy networks and renewables; demonstrated our ability to create and unlock value from developing and operating, as well as owning, assets; and adopted clear long-term goals as we set up the business for long-term success.
“The fundamental strengths of our business and the strategic opportunities afforded by the transition to a low-carbon economy will support the delivery of our five-year dividend plan and creation of value for society as a whole.”
Click here to read the full statement.