SSE Shares Fell in Early Trade on Cut to Adjusted EPS Forecast -- Update
February 08 2019 - 4:42AM
Dow Jones News
(Update includes share price fall, more information on Capacity
Market scheme)
--SSE has cut its adjusted EPS forecast for the year ending
March 31, 2019.
--The energy company assumes it won't be able to recognize GBP60
million relating to the U.K.'s Capacity Market scheme this
financial year
--SSE is also considering options for its energy-services
business after a deal with Innogy collapsed last year
By Oliver Griffin
Shares in SSE PLC (SSE.LN) fell in early trade Friday after the
company cut its forecast for adjusted earnings per share in fiscal
2019, with income due in relation to the U.K.'s Capacity Market
scheme left in limbo by a European Union court ruling made in
November.
Last November the EU's Court of Justice ruled that the Capacity
Market scheme constituted illegal state aid. The scheme, which is
designed to keep energy bills in Britain low, was suspended while
the U.K. government tries to win approval to restart it.
Energy company SSE said while recognition of outstanding payment
under the scheme should be "a matter of timing only," it doesn't
think it will be able to recognize the outstanding 60 million
pounds ($77.6 million) it is owed in the current financial
year.
As a result, SSE said it now expects adjusted EPS for the
fiscal-year ending March 31 in a range of 64 pence-69 pence, down
from earlier estimates of 70 pence-75 pence.
Despite the cut to its adjusted EPS forecast, SSE said it still
intends to declare a full-year dividend of 97.5 pence a share.
The energy company also used the trading update as an
opportunity to provide insight on what it plans to do next with its
SSE Energy Services business.
In November last year a proposed merger between the business and
Npower Ltd., the U.K. retail division of Innogy SE's (IGY.XE), was
scrapped when terms for the deal couldn't be agreed.
SSE said it believes the energy-services business 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 its capital and
investment expenditure to total around GBP1.7 billion.
Shares at 1010 GMT were unchanged at 1,173.50 pence. Shares had
fallen as much as 2.1% to 1,148.50 pence earlier in the
session.
Write to Oliver Griffin at oliver.griffin@dowjones.com;
@OliGGriffin
(END) Dow Jones Newswires
February 08, 2019 05:27 ET (10:27 GMT)
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