SSE : Full Year Preliminary Results published

SSE plc will invest over £7 billion in major low-carbon construction projects to support net zero and spur a green economic recovery.

The pledge comes as it signs up to a new series of science-based targets that will see the company strive to cut emissions further and faster.  

SSE today sets out its full-year financial results for 2019/20, a year in which it delivered a solid recovery and strategic progress, including the sale of its household retail business in GB to OVO Energy in January. Full details are included in today's statement ,which confirms:

• Adjusted operating profit up 37% to £1,488.4m as it recovered from a challenging 2018/19

• Reported operating profit down 40% to £963.4m due to the impact of exceptional items
• Adjusted earnings per share up 35% to 83.6p
• Final dividend of 56p per share, making a full year dividend of 80p per share in line with five-year 2018/19 to 2022/23 dividend plan and providing a boost for pensioners and savers who depend on dividends for income.

The plans outlined today will see SSE invest almost £4m every single day for the next five years on projects including two major new wind farms - generating enough clean electricity to power over 1 million homes.

It has confirmed it willbuild the £580m Viking Onshore Wind Farm on Shetland, one of the windiest parts of the UK, and the £3bn Seagreen Offshore Wind Farm, with Total, which will be the largest in Scotland when built.

Together they'll create around 800 new jobs and support thousands more in the supply chain.

In England, it is continuing to move ahead with plans to build the world's largest offshore wind farm off the coast of Yorkshire, in a boost for the region.  It will create over 1,000 construction jobs at the peak and is just the beginning of ambitious plans for the huge Dogger Bank basin in the North Sea.

SSE has already outlined plans for at least £2.4 billion of potential electricity transmission upgrades to help transport more green energy around the country, alongside other investments across the UK.  Over 90% of its investment will be in low-carbon projects.

Alistair Phillips-Davies, Chief Executive, said:'It's easy to talk about a green recovery, but we're putting our money where our mouth is with £7bn of low-carbon infrastructure projects that can deliver a win-win for climate and economy.

'The investment plans we've set out today underline our intentions as a British business providing a boost to the economy and we want to work with Government to make the green recovery and delivery of net zero a reality. The world is facing twin crises with the economic impact of coronavirus and the climate emergency and the only route forward is to unlock investment.

'Plenty of businesses talk a good game on climate action, but we're serious. That's why we will hold ourselves to account with new science-based emissions reduction targets, independently verified and underpinned by evidence.'

Under the new series of carbon targetsSSE aims to reduce its direct emissions by 60% per gCO2e/kWh by 2030 from 2018 levels, stretching its previous 50% target.  It has also committed to working with its supply chain so that 50% of its suppliers, by spend, will have a science-based target by 2024; and will reduce absolute emissions from use of products sold by 50% by 2034 from 2018 levels.

These goals are directly linked to executive remuneration and SSE will report on its progress against them annually. 

Responding to coronavirus

Throughout the coronavirus crisis, key workers across SSE have worked hard to support the safe and reliable supply of electricity depended on by the people and organisations leading the pandemic response. It has worked closely with trades unions and agreed flexible working, retention of full pay, and has not furloughed any employees or accessed government funding mechanisms. 

SSE is not immune to the effects of coronavirus, and its current assessment is that the impact could be in the region of £150m-250m in 2020/21. However, it is a resilient business with significant opportunities for further low-carbon investment in its core networks and renewables businesses and a comprehensive plan to manage the financial impact, while ensuring it is well positioned to deliver on its low-carbon investment ambitions. 

Business unit performance

SSE's core focus is on renewables and electricity networks and complementary businesses which support the transition to net zero. 

• Its SSE Renewables business confirmed adjusted operating profits of £567.3 up from £455.9m in 2018/19 thanks to windy conditions and the completion of its new Beatrice Offshore Wind Farm.

• Profits in its SSEN networks business were £574.4m, down from £653.4m last year reflecting the phasing of revenue, depreciation costs and lower than expected volumes of electricity in the year.
• In its Thermal business, it made a profit of £156.4m while profits in its Customer Solutions and Enterprise businesses were down to £58m and £8.1m respectively. 
• It completed the sale of its household retail business in GB, SSE Energy Services, to OVO Energy in January 2020, enabling it to increase its core focus on low-carbon infrastructure.
• As part of its well-established strategy to recycle capital from mature assets in order to create further value from low-carbon investments, SSE also confirmed it will look to secure £2bn of non-core disposals up to 2021, focused on assets where it is not the principal operator or where they don't align with the transition to net zero.