SSE share price dips as it warns of lower retail profit and a challenging year ahead

 
Courtney Goldsmith
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SSE said it lost thousands of customers in the third quarter (Source: Getty)

SSE was a top loser on the FTSE 100 this morning after announcing profit from its gas and electricity division is expected to be lower in its full-year results.

The firm's stock was down 1.61 per cent at 1,464p in afternoon trading as it said retail operating profit will be "slightly lower" for the 2016/17 year.

Profit at its networks arm will be flat, and wholesale operating profit is expected to be higher.

For the year ahead, SSE said operating profit at its networks business, including its gas distribution business, Scotia Gas Networks (SGN), will be around £100m lower on a like-for-like basis.

"This and other challenges... mean that SSE expects that its dividend cover for 2017/18 will be within, but towards the bottom of, the expected range of around 1.2 times to around 1.4 times," the company said in a statement.

Gregor Alexander, finance director of SSE, said the operating environment presented SSE with a number of complex issues to manage.

"SSE is a resilient business and we will continue to focus on securing maximum value from our portfolio of wholesale assets, achieving further efficiencies and customer service improvements in our networks businesses, responding positively to competition in our retail markets and creating long-term value through investment of around £1.7bn in 2017/18," Alexander said.

The company, which operates brands such as Southern Electric, Scottish Hydro Electric and Atlantic, increased prices for its customers earlier this month. On average, electric bills on a dual fuel plan will rise by 6.9 per cent, or £73 a year, from 28 April.

In January, the company said it lost 50,000 customer accounts in the third quarter for a total of 8.08m.

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