Perth -based SSE has confirmed it will invest “significantly more” than it earns in profit to expand Britain’s energy infrastructure over the next few years after reporting an operating profit of £1.5 billion, a 15 per cent year-on-year increase.
However the firm’s chief executive, Alistair Phillips-Davies, has had to defend its rise in annual profits amid the cost of living crisis and dismissed the need for a windfall tax.
The Dunkeld Road-headquartered energy group revealed plans to invest more than £15bn in Scotland and over £24bn in Britain’s electricity infrastructure system this decade as part of its Net Zero Acceleration Programme (‘NZAP’).
The company’s integrated operations stretch from renewables to regulated electricity networks. It plans to invest in cutting edge developments including some of the world’s largest offshore and onshore wind projects, critical network upgrades, hydrogen, carbon capture and storage (CCS), and hydro-electric power.
SSE’s £24bn investment goal is up from a previous target of £12.5bn by 2026 and its pre-tax profit came in at £1.16bn for the year to March, compared with £948.9m the year before.
SSE increased its annual dividend to shareholders by 5.8 per cent, while its adjusted earnings per share went up by 22 per cent to 95.4p.
This is expected to grow by an extra 26 per cent to at least 120p this year.
Energy companies are reaping the benefits of sky-high prices, in part because demand has increased post-pandemic and due to supply constraints following sanctions imposed on Russia after its invasion of Ukraine.
SSE’s chief executive Alistair Phillips-Davies said: “We’re investing more money than we’re making in terms of profits.
“And we’re substantially increasing our investments - they were £2bn for the year just gone.
“And we’re looking at £2.5bn in the year that we’re in now, basically to next March.
“That’s the important thing.”
Household energy bills have jumped to an average £2000 a year and are expected to rise to £2800 in October, leading the government to consider a windfall tax on those benefiting from the crisis to pay for help for consumers.
Asked if the SSE plans would be blown off course by a windfall tax, he responded: “What we’ve announced has all been created by very clear and consistent government policy.
“What we want to see going forward is that clear, consistent policy maintained.”
He suggested a windfall tax was unnecessary, saying: “The government’s been incredibly successful to date in terms of policies that they’ve put in place.”
He said its earnings per share were “in line with internal targets”.
Mr Phillips-Davies concluded: “We’ve already achieved a lot, but we’re only just getting started.
“Against the backdrop of a global gas crisis, we are investing far more than we are making in profit to deliver clean homegrown energy that will bolster security, cut emissions and make energy more affordable over the long term – with plans to invest more than £24bn in Britain alone by 2030 to help deliver government’s ambitious targets.
“These results demonstrate the strength of our strategy and highly complementary business mix, the passion and commitment of our people, and our ability to deliver for all our stakeholders as we create thousands of jobs and contribute billions to GDP.”
