Notification of Closed Period
SSE plc will enter its closed period on 11 October 2019, prior to the publication on 13 November 2019 of its financial results for the six months to 30 September 2019.
While SSE’s first half adjusted operating profit has typically beenaround 35% of the full year total, the first-half proportion in 2019/20 is likely to be around 20% of the full year total as a result of:
- over 90% of the expected £115m +/-£15m Energy Portfolio Management (EPM) loss being incurred in the first half of the financial year;and
- the continuing suspension of the Capacity Market means SSE is unable to recognise the outstanding Capacity Market payments that are expected to be received by SSE’s Thermal and Renewable electricity generation businesses in the second half of the financial year.
SSE’s focus is always on results for the full financial year, and the overall outlook described in May 2019 and July 2019 in relation to adjusted operating profit across a number of SSE’s business units in 2019/20 remains largely unchanged. Within this overall outlook:
- lower than expected Distribution Use of System electricity volumes and a greater number of network faults mean that SSEN Electricity Distribution’s adjusted operating profit is now expected to be around £25m lower than first forecast, at around £375m; however,
- recent favourable weather conditions mean that output of renewable energy as at mid-September 2019 is in line with the forecast annual total for the year, compared with the shortfall of around 4% as at June 2019.
Taking all of this into account, based on an expected full-year effective tax rate of between 10% and 12%, and including earnings from Gas Production (see below), SSE currently expects its adjusted earnings per share for 2019/20 to be around 85p-90p*. This is within the range of analysts’ forecasts; and, in line with the outlook for 2019/20 given for business units in May 2019, it assumes the receipt of the suspended Capacity Market payments totalling £148m and normal weather conditions in the last seven months of the financial year.
SSE is making good progress with the planned disposal of its interests in gas production; and in light of this, its Gas Production segment is likely to be deemed to be held for sale in SSE's financial statements. This would have the effect of reducing the forecast adjusted earnings pershare for 2019/20 by up to 5p
*Based on an estimated average share count for the year of 1,035 million.
Reportable operating segments
SSE has today published on sse.com a document setting out changes in its reportable operating segments that will be reflected in its financial statements for the financial year 2019/20 onwards, including the forthcoming results in November.
Gregor Alexander, Finance Director, said:
"SSE has made encouraging progress in the first six months of the financial year. The agreement to sell Energy Services to OVO paves the way for an even clearer strategic focus on regulated electricity networks and renewable energy; and we are pleased with the opportunities that the results of the third CfD allocation round will provide for SSE. The successful projects, combined with existing assets and our portfolio of other investment options, will have a crucial role to play in meeting the UK’s net zero emissions target for 2050.
“The key months of our financial year are still to come, and working to mitigate the economic, regulatory and political uncertainties arising from the Brexit process will continue to be a key priority for SSE. Despite this uncertain backdrop, we are fully committed to recommending a full-year dividend of 80p as part of our five-year dividend plan to March 2023, supported by a recovery in adjusted earnings per share for the full-year and underpinned by a commitment to strong operational performance in the interests of energy customers across the UK and Ireland"