SSE plc
NOTIFICATION OF CLOSED PERIOD
SSE plc will enter its closed period on 12 October, prior to the publication on 14 November 2018 of its financial results for the six months to 30 September 2018. This statement reiterates the technical guidance included in SSE's Trading Statement of 12 September 2018.
Transition
SSE continues to expect the 2018/19 financial year to be one of transition for the SSE group, with the proposed demerger of SSE Energy Services and, subject to final regulatory approval, subsequent combination of that business with npower Group Limited under a new holding company to be listed on the Premium Segment of the Main Market of the London Stock Exchange.
The CMA announced on 30 August 2018 that it has provisionally found that the proposed merger does not raise competition concerns and the transaction remains on course for completion by the end of SSE's current financial year.
Dividend
SSE continues to expect to recommend a full-year dividend of 97.5 pence per share for 2018/19 and to deliver the five year dividend plan it set out in its Business Update on 25 May 2018.
Results
As set out in its Trading Statement on 12 September 2018, SSE expects that its adjusted operating profit for the six months to 30 September 2018 will be around half of that delivered in the same period in 2017 (which was £586m). The position with regard to the Wholesale, Networks and Retail businesses also remains as set out on 12 September 2018. SSE's adjusted net debt and hybrid capital is expected to be around £9.9bn at 30 September 2018.
The outlook for the year to 31 March 2019 is also unchanged from that set out in SSE's Trading Statement on 12 September 2018.
Ratings
SSE believes that its ongoing commitment to a strong financial balance sheet, its high quality portfolio of assets and its increasing focus on economically-regulated networks and renewables contribute towards a strong credit rating. It will engage constructively with S&P following its 'negative watch' announcement on 19 September 2018 and Moody's following its 'review for downgrade' announcement on 24 September 2018.
Investment
SSE is still expecting its capital and investment expenditure to total around £6bn across the five years to March 2023, including around £1.7bn in 2018/19.
The Stronelairg onshore wind farm (228MW), output from which will qualify for Renewable Obligation Certificates, now has 64 of the 66 turbines installed, and 44 commissioned and remains on course for completion in 2019. Beatrice offshore wind farm (588MW; SSE share 40%) now has 20 of the 84 turbines installed, with 18 exporting power, and it also remains on track for completion in 2019.
The £1.1bn Caithness-Moray transmission link is now in advanced stage of commissioning. Scottish and Southern Electricity Networks continues to work with its key contractors to make the necessary progress so that the project remains on track for delivery by the end of 2018.
Other developments
Since SSE published its Trading Statement on 12 September, Total has announced a 'major' gas discovery on the Glendronach prospect, West of Shetland, which is operated by Total E&P UK with a 60% interest, alongside Ineos E&P UK Limited (20%) and SSE E&P UK Limited (20%).
Interim Results on 14 November 2018
At its Business Update in May 2018, SSE set out how it is taking forward a new business model and re-shaping the SSE group to give it a greater focus on its core of economically-regulated networks and renewable sources of energy, and to give investors greater visibility of assets and earnings in the future.
This work is continuing; and at its Interim Results in November SSE expects to set out how its energy portfolio management strategy will evolve to reflect its asset base and operations following the planned SSE Energy Services transaction.
Alistair Phillips-Davies, Chief Executive, SSE said:
"As we announced earlier this month, well-intentioned decisions intended to mitigate commodity price risk to SSE's businesses through energy portfolio management will lead to a disappointing outcome in terms financial results in 2018/19, something the Board clearly regrets.
"We will work very hard in the coming months to deliver the best possible results in the circumstances for 2018/19 while making good progress towards the evolved business model for SSE set out in May 2018. We have made significant progress in our strategic goal of renewing and reshaping the SSE group for the long term with the planned SSE Energy Services transaction on course for completion as planned and key milestones reached in the programme of investment in new assets in regulated networks and renewable energy.
"Fundamentally, it is the quality and nature of its assets and operations in regulated networks and renewables that will support the delivery of SSE's five-year dividend plan, to which we remain committed and which we are confident of delivering."
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