Scottish and Southern profits up

15-11-2006

Scottish and Southern profits up
Scottish and Southern Energy (SSE) has announced a 35 per cent rise in first-half profits, exceeding analyst expectations after reporting strong returns from its coal, hydroelectric and gas assets.

The UK utility firm said that adjusted pre-tax profits for the six months to September 30th rose to £455.4 million, up from £336.3 million a year earlier.

SSE also revealed that it had secured an additional one million customers over the past 12 months, bringing its total number to 7.5 billion.

The company, which proposed to pay an interim dividend of 15.1 pence a share, an increase of 9.4 per cent on the previous year, added that it expected to achieve an overall target for the full year dividend in 2006/07 of at least four per cent real growth.

Commenting on the results, SSE chairman Sir Robert Smith said: "With our continuing emphasis on achieving operational excellence and with many outstanding investment opportunities in front of us, we are in an excellent position to enhance and create value in the future."

However, the energy provider has made it clear that it will not be making a takeover bid for rival Scottish Power, which is currently subject to speculation that Spanish firm Iberdrola may launch a £12 billion offer for it.

Despite long being tipped as a potential bidder for Scottish Power, SSE chief executive Ian Marchant told journalists in a conference call this morning that the company was "not involved and we do not expect to be involved" in the debate over its rival's future.

Like Scottish Power, which yesterday released its own first-half results, SSE said that it had tried to limit the impact of wholesale energy price rises on its customers.

Despite increasing criticism from consumer groups about the rising cost of household energy bills in light of recent falls in wholesale gas prices, SSE, like many providers, is planning to increase bills even further.

The company announced in September that from January 1st, its customers would pay an extra 9.4 per cent for electricity and 12.2 per cent for gas.

However, the company insisted that even after their implementation, "SSE's prices for gas and for gas and electricity combined will remain the lowest in the UK".

In a separate statement today, SSE also revealed that it had decided to abolish the extra charge levied against its pay-as-you-go electricity customers and those on pre-payment tariffs.

The company said that it was making the move in response to requests by anti-poverty campaign groups such as the Child Poverty Action Group and Help the Aged, claiming that the plan would help almost half a million of its customers to reduce their electricity bills by an average of six per cent from next year.

Finally, SSE also announced today that it has made a formal application to regulator Ofwat to request that it be allowed to provide water and waste water services to consumers for the first time.


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