SSE plc (LON:SSE) said this year has presented a “number of complex challenges” as it continued to lose customers in the first quarter due to fierce competition between the ‘big six’ energy suppliers.
Total energy customer accounts in Britain and Ireland fell by 230,000 to 7.77mln at the end of June.
Competition in the sector has been heating up with energy regulator Ofgem consulting on plans to make it easier for customers to switch energy suppliers. The government has also proposed “safeguard tariff” to protect vulnerable customers, in a watered down plan of Theresa May’s general election promise to knock £100 off energy bills for 17m households through a price cap.
SSE faces competitive pressures
SSE said “competition should be at the heart of the retail energy market” but that it believes the industry is already competitive as reflected in its loss of customer accounts.
"As expected, 2017/18 is presenting a number of complex challenges to manage, but SSE is a focused, resilient and adaptable business with efficient operations and disciplined investment at its core,” said chief executive Alistar Philips-Davies.
“There continues to be significant change across the energy sector, but also opportunities for responsibly-minded businesses to contribute positively to its direction in the interests of customers and investors alike. “
Earlier this year the company drew criticism from consumer groups when it revealed it increased its profits from household energy supply in the year to 3 March despite pressure from the government on the industry to make bills more reasonable for customers.
SSE shareholders vote on CEO pay rise
SSE also received a backlash for giving chief executive, Alistair Phillips-Davies a 72% pay rise last year. Shareholders will vote on the recommendation at the company’s annual general meeting in Scotland today.
Ahead of the meeting, SSE confirmed in a trading statement that continues to target an increase in the full-year dividend at least in line with retail price index inflation and to keep the dividend cover within the expected range of around 1.2-1.4 times. However, as previously indicated, the dividend cover is likely to be towards the bottom of that range.
SSE added that it plans to invest about £1.7bn in fiscal year 2017/18 in energy infrastructure in the UK and Ireland and £6bn in the four years to March 2020, mainly in electricity networks and renewable energy.