Profits fall at SSE as giant loses 430,000 customers

SCOTTISH Hydro Electric owner SSE has suffered a six per cent fall in profits after losing around 430,000 customers and faces another challenging year amid moves to cap gas and electricity prices, writes Mark Williamson.

Perth-based SSE achieved £1.45 billion profit before tax and one-offs in the year to March against £1.55bn in the preceding year.

The number of customers buying gas or electricity from the group fell to 8.03 million from 8.47 million as SSE and other members of the Big Six faced competition from new entrants to the market.

The increase in demand during the so-called Beast from the East in March provided a boost to earnings.

However, profits were impacted by the introduction of price caps for some customer groups, such as people using prepayment meters.

A government bill to cap the variable tariffs payable by millions of householders in the UK is expected to receive royal assent this summer.

“SSE has warned against the unintended consequences of such a significant intervention in a rapidly evolving and highly competitive market,” said the group.

The group wants to combine its household supply business with npower in a separate listed business. It said yesterday the combination would create an independent that would be well positioned to respond to changing customer expectations by becoming more efficient, agile and innovative.

The competition watchdog will issue the results of an investigation into the deal in October.

SSE shareholders will vote on the proposal at a general meeting on July 19. SSE expects to complete the deal by the end of March 2019. It will focus on power generation and related infrastructure.

SSE’S chairman Richard Gillingwater said 2017/18 presented complex challenges but SSE’S operational performance was generally very robust. The results were ahead of expectations

He added: “The challenges will continue in 2018/19, which is also expected to be a year of major transition.”

SSE proposed a full-year dividend of 94.7p per share, up 3.7% on last time.