Energy giant SSE profits jump, higher prices to come

If you were already gawping at the size of your most recent gas bill, brace yourself for even more incredulity. SSE has posted record profits and yet is warning it may have to up prices further.

by Michael Northcott
Last Updated: 19 Aug 2013

It’s enough to make you think that the energy companies actually want a terrible reputation with their customers. FTSE100-listed SSE has just announced that annual profits for its household and business arm rose by 27.5% to £410m (which sticks in the throat of cash-strapped householders). It then took the liberty of revealing that prices are to be ratcheted up yet further.

It said that the hike in profits (which British Gas also enjoyed during the period) was due to the cold weather. People had their heating on for many more months of the year in early 2013 than is usual. But in a small gesture of solidarity with Brits and their squeezed wallets, chief executive Ian Marchant, who is soon to depart, has decided to waive the remainder of his bonus. Note that this means he will keep the first portion of it. 

Anyway, pre-tax profits for the entire group, which includes a power plants and networks, rose 5.6% to a massive £1.4bn. That marks the 14th year in a row that profits have increased since the company took its existing form. In celebration, it is raising its full-year dividend by 5.1% to dole out those juicy profits. It is also worth noting that despite calls from the government and public campaign groups for executives to forgo their bonuses this year, they have instead been cut by 40%. 

Justifying the upcoming hike in prices, the firm said: ‘Unless there is a sustained reduction in prices in wholesale gas and electricity markets, it is highly likely that these additional costs will eventually have to be reflected in higher prices for household customers. [We intend] to resist this trend of higher costs for as long as possible to shield customers from the unwelcome impact of higher prices.’ 

Nice to know there’s a touch of altruism amongst all the bonuses and bumper dividends.

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