SSE plans major streamlining and freezes prices until 2016

26th Mar 2014 07:21

- 2013 results to be in line- Retail price freeze until 2016- Plans 1bn pounds of disposals- Further annual cost cutting from 500 more job cuts- Retail and wholesale businesses to split Electricity provider SSE unveiled plans to complete major disposals, freeze its household energy prices until 2016 and cut 500 jobs, as it confirmed results for 2013 would be broadly in line with expectations. In order to deliver its price freeze, SSE said its profit margins in Energy Supply in the next two financial years would be lower than in the past, with supply margins of 4.2% and household supply margins of 6.4%.For the current year, it said earnings would rise "between 2% and 4%' as adjusted pre-tax profit increased by around 9%, dragged down by loss-making retail operations. A 3% increase in the full-year dividend is planned.Amid City speculation this week that SSE and its fellow big six UK energy providers could face being broken up, the FTSE 100 utility exceeded regulatory requirements with these plans for a major reorganisation of the business.Chief Executive Alistair Phillips-Davies said: "We're making sure our own house is in order for the future by streamlining and simplifying our business; and we're making clear we wish to work with people to find more ways of taking costs out of energy bills." The Scottish headquartered company said it intended to split its wholesale and retail business and had already started a programme of disposal of non-core or burdensome assets, which it expects to reap proceeds and debt reduction of around £500m, as well as £500m of assets such as onshore wind farms to releasing further capital.The split into two new companies is planned to be completed by the end of March 2015.With a slimmer asset base, SSE has looked to push through 500 voluntary redundancies to produce annual overhead savings of £100m by the end of its 2015/16 financial year.Shares in SSE were up 1% to 1,499p at 08:06 on Wednesday.OH