SSE on course for full year divi of at least 74.5p

10th Nov 2010 07:24

Fears that the dividend of utility Scottish & Southern Energy (SSE) might be under threat look premature, as the company bumped up its interim dividend by 6.7%.The company hiked its interim dividend from 21.0p last year to 22.4p this time round, and said it is on course for a full year dividend of at least 74.5p per share."SSE's key financial objective is dividend growth, and we are on course to meet our target of a 2% real increase for the full year 2010/11, while maintaining a dividend cover in line with our established range," said Lord Smith of Kelvin, chairman of SSE. Adjusted profit before tax in the six months to 30 September dipped 6.1% to £385.5m from £410.5m the year before. That was comfortably ahead of JPMorgan Cazenove's forecast of £368m.The company said the full year adjusted profit before tax is on track to be in line with market consensus forecasts. Adjusted profit before tax excludes, among other things, the effect of International Accounting Standard 39, which requires companies to record certain forward commodity contracts that are deemed to be derivative financial instruments, at 'fair value'.Reported profit before tax rose to £644.8m from £514.4m the year before. Adjusted earnings per share eased 2.9% to 33.2p from 34.2p the year before.It was a mixed period for power station availability rates, with the gas stations upping availability up to 96% from 89% the year before while the coal fire powered stations saw availability slide to 87% from 94%.Investment and capital expenditure over the period was 3.6% higher than a year earlier at £653.6m.Capital and investment expenditure is forecast to average around £1.5bn to £1.7bn a year through to 2015."Our investment programme is well-financed, and the very successful issue of hybrid capital in September provides us with another source of attractively-priced funding. At the same time, discipline remains paramount in all of the financial decisions we make. This discipline, allied to SSE's diverse energy businesses and delivery of operational and investment excellence, is what supports sustained real dividend growth," Lord Smith said.