Energy supplier SSE reports profits drop amid “intense” competition
Energy supplier SSE has seen its profits drop amid “intense retail market competition”.
The figures
The FTSE 100 company’s reported pre-tax profit was £593.3m for the year to 31 March, down 19.3 per cent from £735.2m.
Adjusted pre-tax profits of £1.51bn were down from £1.56bn in 2015.
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SSE said its adjusted earnings per share were down 3.7 per cent to 119.5p, but ahead of its target of at least 115p.
The company's full-year dividend per share, meanwhile, rose from 88.4p in the year to 31 March 2015 to 89.4p.
The company’s adjusted operating profit was £1.82bn, down from £1.88bn.
Why it’s interesting
In the year to 31 March, SSE’s energy customer accounts in Great Britain and Ireland fell from 8.58m to 8.21m.
The company said it is aiming to significantly reduce the rate of customer losses in the coming year.
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It noted that energy supply in Great Britain particularly is "intensely competitive, with political, regulatory and market factors all contributing to the rapid growth of new market entrants, of which 11 have come to market in the past year alone".
SSE also said that customers are “highly engaged”, with more than 475,000 switching supplier in March 2016 alone.
In March, the Competition and Markets Authority (CMA) laid out plans to introduce more competition into the UK energy market.
What the company said
Chief executive Alistair Phillips-Davies:
It has been another year in which SSE has delivered what it said it would. Nevertheless, the operating environment presented a number of complex issues, including the impact of prevailing commodity prices and intense retail market competition. At the same time, SSE has continued to demonstrate financial discipline and commitment to its long-term strategic framework.
The fact that some of the mist is beginning to clear around the legislative, political and regulatory environment means there are grounds for some cautious optimism for the next couple of years.
SSE continues to invest for the future and in the year ahead plans almost £1.75bn of investment into new energy infrastructure in the UK and Ireland and improvements in services for our customers. SSE will continue to identify opportunities for growth, whilst maintaining its financial discipline, enabling it to deliver for customers, achieve its core purpose and meet its dividend commitments.