SSE PLC (LSE:SSE) has beefed up investment plans as it reported soaring profits but guided shareholders to lower dividends and earnings going forward.
In the year to March 31, 2023, the FTSE 100-listed power generator reported pre-tax profits of £2.18bn, up 89% from £1.16bn the year prior while EPS of 166p, ahead 75% from 94.8p a year ago.
The company has increased its investment plans as part of the 'NZAP Plus' five-year strategic plan to 2027 with £18.0bn of capital investment planned, an increase of more than 40% on the previous plan.
In the results statement, Alistair Phillips-Davies, SSE chief executive, said: "Action, not just ambition, is what is needed to provide lasting solutions to the problems of climate change, energy affordability and security - and, with a record-breaking investment programme, that is what we are delivering.”
“The 'NZAP Plus' raises the bar on our ambitions to 2027, and provides a solid platform for growth that could see us invest up to £40bn over the next decade,” he added.
SSE said capital allocation would be “reshaped” between regulated electricity networks (c.50%), renewable electricity generation (c.40%), low-carbon flexible thermal generation and other businesses (c.10%).
Looking ahead, the company guided investors to lower earnings and dividends in the year ahead.
SSE forecast adjusted EPS of more than 150p for 2023/24, with capital expenditure and investment of more than £2.8bn in 2023/24, exceeding the record investment in 2022/23.
A rebased 60p pence dividend for 2023/24, enabling growth with annual dividend increases of between 5-10% is now targeted to 2026/27. That compares to the 96.7p total dividend SSE announced today.