SSEZY SSE PLC (PK)

By Oliver Griffin

SSE PLC (SSE.LN) sees adjusted earnings per share in fiscal 2019 lower than previously expected and is considering options for its SSE Energy Services business after plans for a merger with Npower Ltd. were scrapped.

The U.K. energy company said it now expects adjusted EPS for fiscal 2019 in a range of 64 pence-69 pence ($0.83-$0.89), down from earlier estimates of 70 pence-75 pence.

The fall in earnings outlook is because SSE is unlikely to receive or be able to recognize income from the U.K.'s Capacity Market scheme after a judgment by the Court of Justice of the European Union withdrew its approval for the mechanism.

SSE said it is considering a number of options for its SSE Energy Services businesses after plans to merge the unit with Npower, the U.K. retail business of Innogy SE's (IGY.XE), were scrapped in December.

SSE said it believes the unit will best succeed outside of the group. To that end, SSE said it is considering a standalone demerger and listing of the business, a sale of the unit, or an alternative transaction.

If none of the options is viable, SSE said it might retain its energy services business as a separate, ring-fenced business within the group that would be expected to be cashflow positive.

For the full year, SSE said it still expects that its capital and investment expenditure to total around GBP1.7 billion. The company backed its intention to declare a full-year dividend of 97.5 pence a share.

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

(END) Dow Jones Newswires

February 08, 2019 02:40 ET (07:40 GMT)

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