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Profits shoot up at SSE

Article By: ,  Financial Analyst
May 21, 2014 11:45 AM

Energy supplier SSE has announced a significant increase in its annual profits, with the results revealed by the firm today (May 21st).

The company stated that its profits for the year to the end of March were 9.6 per cent up on the previous 12 months, with the figure recorded at £1.55 billion compared to last year's £1.4 billion.

However, SSE stressed that it is still a "challenging" time for the energy industry, due to the increased level of competition between suppliers and the fact trust between the sector and the general public is at a low ebb.

SSE also revealed it lost 370,000 customers during the course of the year, with the number of electricity and gas customer accounts it holds down from 9.47 million to 9.10 million.

Chief executive Alistair Phillips-Davies admitted in an interview with BBC Radio 4's Today programme this morning that the results represent a "mixed bag" for the company.

Price freeze

SSE's previously announced commitment to freeze energy tariffs for the next two years is set to reduce profits by £100 million and the firm has already seen its revenues from its retail division fall heavily in the last 12 months.

Mr Phillips-Davies said: "I think there is a lot SSE can offer, but people have switched. [However] I think we have lots of customers satisfied because they are staying with us."

Smaller energy companies are increasingly competing with the Big Six energy suppliers in the UK, which is made up of SSE, British Gas, npower, E.ON, EDF and Scottish Power.

A one-off charge of £747.2 million was also included in SSE's latest financial results, which the firm said was due to its scaling back of its offshore wind projects.

Despite a close to ten per cent rise in profits, investors do not appear to be convinced by the financial results and the share price of the company is broadly flat in the early stages of trading this morning. After a slight dip earlier in the day, stocks were 0.13 per cent up at 08:23 BST. However, by 10:15 BST, they had fallen 1.47 per cent.

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