SSE to unveil bumper profit next month
SCOTTISH and Southern (SSE) is set to announce a near doubling of its interim profits next month, leading to speculation that it could mount a bid for assets owned by rival EDF.
SSE, Britain’s second largest energy group, is forecast to unveil pre-tax profits of around £600m, up from £302.6m, for the half year to the end of September, according to a poll of analysts.
The energy firm issued a trading update last week saying profits would be “significantly higher” than last year’s and said it expected to increase its dividend by at least four per cent above inflation.
Analysts say that SSE could use the bumper earnings to help it buy EDF’s distribution arm, which delivers electricity to London, the South East and East Anglia. The assets could fetch as much as £4bn.
EDF’s parent, Electricité de France, is looking to offload the business to help it build Britain’s next generation of nuclear reactors.
Last year, the firm – which counts the French state as its biggest shareholder – paid £12.5bn for British Energy, which supplies around a sixth of the UK’s energy through its nuclear reactors.
It has since sold 20 per cent of British Energy at a steep discount to British Gas owner Centrica for £2.3bn and there has been speculation that it was looking for a buyer for a further 20 per cent stake.
But last week, EDF said it would instead sell its distribution business in a bid to free up cash, with SSE emerging as a clear favourite.
Yesterday, SSE refused to comment on whether it was interested in the assets.