Charles Stanley remains cautious on SSE

26th Jan 2015 16:36

Broker Charles Stanley reiterated its 'hold' rating for SSE, after the energy company its earnings were expected to be flat, though the management remained committed to grow the annual dividend.SSE said it expects earnings per share to be 123.4p, slightly above consensus of 121p and added it expected to raise the full year dividend for 2015, even though its management continue to see greater risk to earnings growth in 2016 and 2017."SSE's valuation is not overly demanding and supported by an attractive dividend yield, but trading conditions remain pretty tough and political risk elevated," Charles Stanley said in a note on Monday.The number of household customers has fallen to from 9.10m in 2014 to 8.71m with lower demand in warm weather and in response to renewed political pressure, due to the sharp decline in oil annd gas prices, SSE said it will reduce household gas prices by 4.1% on 30 April and extend its price freeze by six months until July 2016.The firm added it anticipates capital expenditure £1.6bn in 2015, with expenses to average £1.3bn in the years through to 2018, with emphasis on its networks division.SSE shares were up 1.81% to 1,519.00p at 16:33 on Monday.