Lord Smith of Kelvin, Chairman of SSE, said:
"There is no doubt that 2011 has been characterised by turmoil in the global energy markets, economic uncertainty across much of the world and widespread concern about the financial outlook for customers, companies and countries. This is not a straightforward time in which to do business.
"It's at times like these that companies need to be clear about what matters for the long term, and doing the right things accordingly. For SSE, that means earning the trust of customers in retail and business markets, investing in assets to support secure and lower carbon supplies of energy in the future, and delivering above-inflation dividend increases every year to provide income that shareholders, such as pension funds, require.
"I expect SSE to make significant progress in each of these areas in the rest of this financial year and beyond. We are expecting to report a moderate increase in adjusted profit before tax in our full-year results next May.
In addition, today's 7.1% increase takes our interim dividend to 24.0p per share, which means we are on course to meet our full-year target for 2011/12, with a dividend of around 80p per share, thus maintaining our record of delivering real dividend increases in every year since SSE was formed in 1998."
Dividend
Increasing the Interim Dividend in 2011/12
SSE's first financial responsibility to its shareholders is to remunerate their investment through the delivery of sustained, above-inflation increases in the dividend. The Board is declaring an interim dividend of 24.0p per share, compared with 22.4p in the previous year. This is:
- an increase of 7.1% compared with 2010/11;
- more than three times the first interim dividend declared by SSE, in 1999; and
- more than double the interim dividend declared in 2004, since when there has been compound annual growth of 9.9%.
SSE remains one of just six FTSE 100 companies to have delivered better-than-inflation dividend growth every year since 1999, when it paid its first dividend.
Targeting further dividend increases in 2011/12 and beyond
SSE is aiming to deliver an increase in the full-year dividend for 2011/12 of at least 2% more than RPI inflation (based on the average rate of inflation in the UK between April 2011 and March 2012). Subject to the rate of RPI inflation in the next few months, this should result in a full-year dividend of around 80p per share. The same RPI +2% target is in place for 2012/13, with sustained annual real growth thereafter also being targeted.
