SSE notification of closed period

[daveh]

and trading statement and dividend information can be found here:

www.investegate.co.uk/article.aspx?id=2 ... 2499U&fe=1

SSE expects that it will deliver for 2018/19:
· A full-year dividend of 97.5 pence per share;
· Adjusted earnings per share in the range of 64p-69p;*
· Cash proceeds of over £1bn from value-creating asset disposals;**
· Capital and investment expenditure totalling around £1.7bn; and
· Net debt and hybrid capital of around £9.5bn on 31 March 2019, taking account of disposals and down from the previous estimate of £9.8bn.

They also reiterate that next years dividend will be 80p and they are still looking to hive off the customer service part of the business.

Net debt and hybrid capital is going to be slightly less than predicted and the dividend is still uncovered by adjusted EPS.

[moorfield]

They also reiterate that next years dividend will be 80p and they are still looking to hive off the customer service part of the business.

Yes we have been warned, and that will put a dent in my overall income plan next year (SSE currently contributes 7.5%). So what to do - hold or sell? I thought I'd float that on-topic question before this got bussed off to Company News! I won't beat the 8.0% yield (97.5p/1222.2p) elsewhere (unless I buy CNA ) but I might beat a 6.5% yield (80p/1222.2p).

[kempiejon]

The comment previously noted about the reduced dividend was, I feel, in the context of we'll be a smaller entity and the hived off part will have value. This has not so far transpired and the dividend is still looking to be reduced. This will hurt my income without realising any of that value.

"Work on the future options for SSE Energy Services, set out in SSE's Q3 Trading Statement on 8 February, is continuing, including progress on potential external collateral arrangements that may support the opportunities for a future outside the SSE Group. Should these options not be viable, SSE would expect to retain Energy Services as a separate entity within the SSE Group. All options are being assessed with the interests of customers, employees and shareholders being given full consideration. SSE intends to provide an assessment of the preferred option by the end of May 2019"

So perhaps the end of May (not Terri) will shed some light on how we'll realise that value of the separate entity.

[daveh]

The comment previously noted about the reduced dividend was, I feel, in the context of we'll be a smaller entity and the hived off part will have value. This has not so far transpired and the dividend is still looking to be reduced. This will hurt my income without realising any of that value.

"Work on the future options for SSE Energy Services, set out in SSE's Q3 Trading Statement on 8 February, is continuing, including progress on potential external collateral arrangements that may support the opportunities for a future outside the SSE Group. Should these options not be viable, SSE would expect to retain Energy Services as a separate entity within the SSE Group. All options are being assessed with the interests of customers, employees and shareholders being given full consideration. SSE intends to provide an assessment of the preferred option by the end of May 2019"

So perhaps the end of May (not Terri) will shed some light on how we'll realise that value of the separate entity.

I listen to Radio Scotland as I drive to work in Aberdeen and as we are

The oil and renewables capital of Europe

they were talking to a Shell Executive about their commitment to renewables in light of their recent purchase of a small renewables company and rebranding their renewables electricty supplier Airtricity to Shell Energy (I think). The interviewer specifically asked about intermitancy ( of renewables ), the scale of their customer supply bussiness and had they thought of buying the customer arm of SSE which was up for sale. He refused to answer, other than to say they were examining all options.
It would be a good fit though, so it is a possibility for a purchaser.


(edited for spelling - my proof reading is getting worse!)

[daveh]

The comment previously noted about the reduced dividend was, I feel, in the context of we'll be a smaller entity and the hived off part will have value. This has not so far transpired and the dividend is still looking to be reduced. This will hurt my income without realising any of that value.

"Work on the future options for SSE Energy Services, set out in SSE's Q3 Trading Statement on 8 February, is continuing, including progress on potential external collateral arrangements that may support the opportunities for a future outside the SSE Group. Should these options not be viable, SSE would expect to retain Energy Services as a separate entity within the SSE Group. All options are being assessed with the interests of customers, employees and shareholders being given full consideration. SSE intends to provide an assessment of the preferred option by the end of May 2019"

So perhaps the end of May (not Terri) will shed some light on how we'll realise that value of the separate entity.

I listen to Radio Scotland as I drive to work in Aberdeen and as we are

The oil and renewables capital of Europe

they were talking to a Shell Executive about their commitment to renewables in light of their recent purchase of a small renewables company and rebranding their renewables electricty supplier Airtricity to Shell Energy (I think). The interviewer specifically asked about intermitancy ( of renewables ), the scale of their customer supply bussiness and had they thought of buying the customer arm of SSE which was up for sale. He refused to answer, other than to say they were examining all options.
It would be a good fit though, so it is a possibility for a purchaser.


(edited for spelling - my proof reading is getting worse!)

Having just reread the trading statement Airtricity is owned by SSE and it is/was First Utility that is owned by Shell and has been renamed Shell Energy. So I am now unsure whether the interviewer was suggesting Shell Energy/First Utility acquire SSE AirTricicty or the whole of the SSE energy service group.

[Gengulphus]

The comment previously noted about the reduced dividend was, I feel, in the context of we'll be a smaller entity and the hived off part will have value. This has not so far transpired and the dividend is still looking to be reduced. This will hurt my income without realising any of that value.

Do remember that it's the 2019/20 dividend that they're looking to reduce, and that the interim part of that would be expected to be announced in November (8 months away) and the final part in May next year (over a year away), and actual payment of those are about a year and 18 months away respectively on the current payment schedule. And that they're also actively looking to hive off SSE Energy Services, probably with a preference for the same sort of timescale. There's no actual linkage between the two, so it might end up that the dividend plans go through unchanged without the hiving-off happening and that the company doesn't respond to that by paying some extra dividend for the SSE Energy Services earnings that they weren't expecting - which is your income-hurt-and-no-value-realised scenario. But that's a long way from saying that that scenario will happen!

In short, yes, a risk, which I would say is essentially the risk that SSE Energy Services turns out not to have any value or far less value than the management think it has, but nowhere near a certainty.

Gengulphus