SSE to ramp up investment in electricity grid after record £3.6bn spend
SSE has said it expects to increase its investment in the electricity grid to more than £5billion after record spending over the last year.The energy supplier said it had ramped up its capital expenditure to £3.6billion in the year to the end of March, from £2.9billion in the previous year.It expects this to 'significantly increase' to over £5billion in the current year, as part of its £33billion investment plan to upgrade and expand its electricity network.The plan, which was unveiled last November, is fully funded until 2030, as part of the Government's push to decarbonise Britain's power sector.Chief executive Martin Pibworth said the investment is 'central to long-term value creation' and would also help to reduce the UK's 'exposure to volatile global energy markets'.The recent spike in energy prices caused by the Middle East conflict has brought the issue of the UK's energy security into the spotlight. Energy secretary Ed Miliband has come under fire over his refusal to grant new drilling licences in the North Sea. SSE ramped up its capital expenditure and investment to £3.6bn SSE said it had seen 'no immediate impact from macro volatility' on its performance. Its reported earnings per share of 153.5p was at the top end of its guidance. The energy group revealed pre-tax profits dipped by 1 per cent to £1.84 billion for the year to March, while adjusted operating profits fell 8 per cent to £2.2billion. A jump in operating profits at its transmissions business to £562.6 million helped offset a weaker performance at its distribution and flexibility businesses, as market conditions and outages weighed on earnings.SSE expects profits in its transmission and thermal businesses to be significantly higher over the next year, supported by higher regulated revenues and increased capacity market payments.Meanwhile, profits at its distribution and renewables are expected to be similar to the previous year.Despite increased spending, SSE said its adjusted net debt and hybrid capital remained flat.It recommended a final dividend of 47.3p a share, taking the full-year payout to 68.7p, from 64.2p the previous year.Duncan Ferris, investment writer at Freetrade, said: 'For the moment, SSE's energy transition plans and operations are on track, and the business appears to be bearing the weight of investment well.'That's just as well, as buildout projects like SSE's are an important part of the UK energy infrastructure puzzle. Today's results come after recent months have served as yet another reminder of the increasing importance of domestic energy security.'SSE will hope that the future potential of its grid buildout and increased dividend payments are enough to keep investors interested while the business prioritises investment over near-term earnings momentum.'Shares in SSE were flat at 2,429p this morning.AJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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SSE to ramp up investment in electricity grid after record £3.6bn spend
