SSE defends dividends and performance

COMPANY chairman Lord Smith of Kelvin offered a stout defence of SSE’s performance, insisting the firm paid tax, employed people and “kept the lights on”.

But he also said shareholders, including pension funds, needed a guaranteed return on their stakes and that the Perth concern would continue to work on delivering those dividends.

“While some observers may choose to criticise SSE for making a profit and paying a dividend, I believe that profit and dividend allow SSE to employ people, pay tax, provide services that customers need, make investments that keep the lights on and create jobs, while providing an income return that shareholders like pension funds need,” the peer said.

SSE’s interim statement to the markets said it required the support of investors to fulfil its core purpose of providing the energy people need to heat their homes.

It said it “continued to believe” those investments should be remunerated, and its strategy was to target “sustained real growth”.

The company, which employs a total of around 19,500 staff, is targeting a full-year dividend increase of 2% above inflation this year and said it would do likewise beyond.

Adjusted earnings per share during the first half of the current financial year rose by more than 40% to 35.3p.

Lord Smith said SSE’s “balanced model” of business continued to prove its worth, and promised shareholders that returns would continue to grow despite pressure over massive profits.

“Its commitment to the dividend remains the hallmark of a company that takes a disciplined and long-term approach to business here in the UK and in Ireland,” he said.

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“For this reason, there can be every confidence that SSE will extend further its record of annual aboveinflation dividend growth.”

Which? e xe c u t iv e director Richard Lloyd said the announcement showed why the Government should set up an independent review to look at whether recent price increases are justified.

“Without greater scrutiny of energy prices, consumers simply will not believe that they’re getting a good deal,” he said.

Meanwhile, the Labour energy spokeswoman Caroline Flint said many consumers would not understand how “energy giants can get away with inflation- busting price rises” when profits were already on the rise.

Lord Smith

Richard Lloyd