SSE shares edge up as it commits to dividend rise

Suzie Neuwirth
SSE’s shares rose slightly yesterday, after the energy supplier reassured investors that it would be increasing its dividend this year.

The FTSE 100 firm’s shares plummeted last week, wiping £1.15bn off its value, after Labour leader Ed Miliband proposed to freeze energy bills until 2017 if elected.

In yesterday’s trading update, the big six energy firm warned that it expects its retail division to have made a loss during the first half of the year, in part due to higher wholesale costs. However, it said a poorer first-half performance than the previous year should have no implications for the full financial year.

“Despite the intensifying political debate, we will maintain our operational and financial discipline, to enable us to deliver an above-inflation increase in the dividend for this financial year and beyond,” said finance director Gregor Alexander in the statement.

SSE escaped a downgrade from Fitch yesterday. The ratings agency said that this reflects “SSE’s largely regulated and resilient cash flow profile…though [this] may change after April 2015.” However, it warned that “aspects of the UK government’s energy market reform remain uncertain, effectively deferring capex in generation and renewables.”

Rival Centrica would not confirm its dividend plans but told City A.M. its policy is “to deliver real dividend growth”.