Annual profits

Cost of living: SSE boss defends 23% rise in annual profits and rejects calls for windfall tax | Economic news

The chief executive of SSE defended the energy company’s 23% rise in annual profits, which were supported by rising energy prices.

SSE chief executive Alistair Phillips-Davies has rejected calls for a exceptional tax on energy company profits, highlighting the company’s plans to invest £24bn in UK energy infrastructure this decade, including new wind and hydro projects.

“We invest more money than we earn in terms of profits,” he told Sky News.

UK ‘heads into unprecedented territory’ as energy price cap rises – latest cost of living

“And we are increasing our investments significantly – they were £2bn for the year just past.

“And we’re looking at £2.5bn in the year we’re in, basically until next March. That’s the important thing.”

Asked if plans would be derailed by a windfall tax, he said: “What we have announced today has been created by very clear and consistent government policy.

“What we want to see going forward is that this clear and consistent policy is maintained.”

He suggested a windfall tax was unnecessary, saying: “The government has been incredibly successful to date in terms of the policies it has put in place.”

He said his earnings per share were “in line with internal targets.”

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Profits of energy companies “hard to justify”

In its preliminary results, the FTSE 100 group said it expected even stronger earnings this year and raised its earnings outlook for the next four years.

The company cited “higher and more volatile energy commodity prices” which benefited its gas-fired power plants.

SSE’s pre-tax profit was £1.16bn for the year ending March, up from £948.9m the year before.

The company also operates energy networks, wind farms and hydroelectric power plants.

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SSE increased its annual dividend to shareholders by 5.8%, while its adjusted earnings per share rose 22% to 95.4p. This is expected to rise another 26% to at least 120p this year.

Energy companies are take advantage of exorbitant pricespartly because demand has increased as the world emerges from the pandemic and because of supply constraints following the sanctions imposed on Russia after its invasion of ukraine.