SSE plc, the Perth-based power giant, has raised its annual earnings expectations, helped by the strong performance of its flexible generation plant.
Shares of SSE, the biggest listed firm run from Scotland, rose as much as 3% to around £17.80 to give the company a stock market value of about £19.4 billion.
The FTSE 100 firm also announced board changes, with the appointment of international energy industry veteran Maarten Wetselaar as a new independent non-executive director from September 1, 2023. Wetselaar will join SSE’s nomination committee, audit committee and energy markets risk committee.
Wetselaar is currently chief executive of Compania Espanola de Petroleos, S.A. (CEPSA), the Spanish multinational oil, gas, and diversified energy company. He joined CEPSA on January 1, 2022, following over 26 years at Shell, including the last six years as a member of the executive committee in charge of the integrated gas and new energies business.
Sue Bruce will stand down from the board at the end of this month and Peter Lynas will stand down after the AGM in July 2023.
SSE updated its expectations for full-year 2022-23 adjusted earnings per share to more than 160p from the previous guidance of more than 150p.
“This reflects the strength and stability of SSE’s balanced mix of regulated and market-facing businesses and the continued narrowing of the range of probable financial outcomes for the period,” said the Perth firm.
“In particular, continued strong performance from flexible generation plant to support security of supply has more than offset the lower than planned renewables output and associated hedge buy-back costs.”
SSE also said it intends to recommend a full-year dividend of 85.7p per share plus RPI for 2022-23 followed by a rebase to 60p in 2023-24 to support the group’s significant investment plans.
Thereafter, dividend increases of at least 5% per annum are targeted for 2024-25 and 2025-26.
SSE said it remains on course to deliver record investment in 2022-23 with capital expenditure — including acquisitions — still expected to be in excess of £2.5 billion.
SSE Finance Director Gregor Alexander said: “As we progress our ambitious Net Zero Acceleration Programme, we are investing more than we make in profits into the infrastructure society needs for a more secure, affordable and clean energy system.
“Our balanced business model has performed well in a volatile year, helping to ensure security of supply.
“At the same time, we are progressing multiple projects and adding to our pipeline as we deliver on our net zero focused electricity infrastructure strategy.
“This strong performance leaves us well positioned to continue our significant investment programme and we will update the market with more detail in May.”
On new director Wetselaar, SSE added: “He has held a variety of international leadership roles which included playing a pivotal part in establishing Shell’s renewables business activity and with previous positions spanning finance as well as strategic and operational activities. More recently, at CEPSA, Maarten has launched a transformational strategy to convert the company into a European leader in green hydrogen and biofuels. Having spent his entire career in the energy sector, including living and working in a number of international markets across Europe, the Americas and Asia, Maarten will bring a wealth of relevant experience for SSE’s growth plans domestically and internationally. He clearly also brings current working knowledge across capital markets, commodity markets and large capital investments in the sector.”