SSE PLC: PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 MARCH 2023
24 MAY 2023
BUILDING FOR CLEAN, SECURE, AFFORDABLE ENERGY
· Record £2.8bn of capex and investment, greater than profits, in projects across low-carbon electricity infrastructure that will enhance energy security while creating green jobs and supporting local communities.
· Reporting adjusted earnings per share of 166.0p, in line with pre-close guidance, reflecting the performance from a balanced, integrated business model in a year of market volatility.
· Continued focus on Safety, however increased construction activity has contributed to a Total Recordable Injury Rate of 0.19, an increase from 0.17.
· Strategic debt refinancing and increasing cash flow generation provides the group with more financial strength to weather future market uncertainty, seize opportunities and create value.
· Guiding to adjusted EPS of more than 150p for 2023/24, with capital expenditure and investment of more than £2.8bn in 2023/24, exceeding the record investment in 2022/23.
· Contributed over £6bn to UK GDP, supporting nearly 40,000 UK jobs with further €429m contribution to Ireland GDP and over 2,000 Irish jobs supported.
ANNOUNCEMENT OF “NET ZERO ACCELERATION PROGRAMME PLUS”
Continuing the acceleration of investment through the “NZAP Plus” five-year strategic plan to 2027, upgrading targets whilst also advancing previous plan by 12 months, to account for changing investment mix:
· Upgraded £18.0bn capital investment plan, an over 40% increase on previous plan.
· Reshaped capital allocation between regulated electricity networks (c.50%), renewable electricity generation (c.40%), low-carbon flexible thermal generation and other businesses (c.10%).
· Investment will deliver c.5GW net renewables capacity additions and grow net electricity networks RAV to between £12-14bn by 2027.
· Adjusted EPS CAGR of 13 – 16% over the five-year period, excluding developer profits.
· Investment plan remains fully funded, supported by strong balance sheet with average 3.5 – 4.0x net debt / EBITDA across the plan, well within strong investment grade credit ratios.
· Rebased 60 pence dividend for 2023/24, enabling growth with annual dividend increases of between 5 – 10% now targeted to 2026/27.
Recognising the significant strengthening of the balance sheet and the well-balanced upgraded investment plan, the NZAP Plus reflects SSE’s conclusion that retaining 100% ownership of SSEN Distribution is the right strategy at this time.
Alistair Phillips-Davies, SSE plc Chief Executive, said:
“Action, not just ambition, is what is needed to provide lasting solutions to the problems of climate change, energy affordability and security – and, with a record-breaking investment programme, that is what we are delivering. Through delivery of our societally-aligned strategy we are accelerating the build-out of renewables, reinforcing the networks needed to decarbonise, providing much-needed flexible generation, and working hard to ensure no-one is left behind in the transition to net zero. The results that we have reported today are profits with a purpose. We are creating value for all of our stakeholders and our investments exceed our earnings.
“On the back of our strong financial performance in the year, the resilience of SSE’s balanced business mix and underlying finances, the pace of strategic delivery and the wealth of opportunities coming our way, we have updated our Net Zero Acceleration Programme (NZAP) that we announced 18 months ago.
“The “NZAP Plus” raises the bar on our ambitions to 2027, and provides a solid platform for growth that could see us invest up to £40bn over the next decade. The energy landscape is changing fast, and the macroeconomic and geopolitical environment has its challenges, but these are exciting times for SSE and we have both the financial footing and capabilities to go after high quality growth opportunities that will create value for years to come.”