Lord Smith of Kelvin, Chairman of SSE, said:
"SSE's focus is always on full-year results, because the potential for volatility is always much greater in a half year period, but it is obviously encouraging that adjusted profit before tax* in the first six months has been restored to a level around that achieved in 2010. This does not hide the fact, however, that energy market conditions remain challenging. The prices achieved for generating electricity have been weak, and higher gas and non-energy costs unfortunately had to be reflected in the increase in household energy prices which SSE implemented last month. The Energy Supply business accounted for 8.1% of SSE's adjusted operating profit* in the period and its profit margin was 1.5%.
"While some observers may choose to criticise SSE for making a profit and paying a dividend, I believe that profit and dividend allow SSE to employ people, pay tax, provide services that customers need, make investments that keep the lights on and create jobs, while providing an income return that shareholders like pension funds need.
"SSE's balanced model of market-based and economically-regulated businesses, and the robustness of its strategy of focusing on operations and investment in each of those businesses, continues to prove its worth. Its commitment to the dividend remains the hallmark of a company that takes a disciplined and long-term approach to business here in the UK and in Ireland. For this reason, there can be every confidence that SSE will extend further its record of annual above-inflation dividend growth, and it is targeting a full-year increase of at least 2% more than RPI inflation, to around 84p, for 2012/13 and annual increases that are above RPI inflation in the following years."
DELIVERING THE DIVIDEND
STRATEGY AND FINANCE
Delivering sustained real growth in the dividend
Interim dividend up 5.0% to 25.2p per share
Targeting full-year dividend increase of at least RPI +2% for 2012/13
Targeting annual dividend increases above RPI inflation in 2013/14 and beyond
Adjusted earnings per share* up 40.6% to 35.3p
Adjusted profit before tax* up 38.3% from £287.4m to £397.5m (2010: £385.5m)
Outlook for full-year adjusted profit before tax* to be provided in Q3 IMS, as planned
Ongoing investment in new assets through six-month capital expenditure of £699.2m
Adjusted net debt and hybrid capital up £298m to £7.054bn since 31 March 2012
Medium/long-term funding, including hybrid capital, of £1.48bn secured at good rates
Average debt maturity of 10.9 years
