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Retail profits at energy provider SSE rise 30% to ?410 million - @Guardian

SSE - Scottish and Southern Energy

SSE was fined ?10.5m by Ofgem last month for 'prolonged and extensive' mis-selling. Photograph: Andrew Milligan/PA

Scottish and Southern Energy saw a near 30% rise in profits from its retail customers last year, fuelling accusations that the big energy firms are profiteering at the expense of UK households.

Under the heading Earning the Right to Make a Profit, SSE announced operating profits of ?410m from its retail arm in the year to the end of March.

SSE was hit by a mis-selling scandal that saw it fined a record ?10.5m in April. The SSE chairman, Lord Smith of Kelvin, said on Wednesday: "Like everyone else associated with SSE I have no hesitation in apologising unequivocally for the breaches that occurred; but while the breaches were clearly wrong, the response has been absolutely right."

He said the company had reformed its retail operations since 2011 and introduced a sales guarantee to reimburse any losses experienced by customers joining the company.

The huge rise in profits will cause further outrage among fuel poverty campaigners and householders struggling to pay their bills. Speaking ahead of the results, Elizabeth Ziga, of the Fuel Poverty Action group, said: "While SSE customers were skipping meals to keep the heating on, the company continued to rake in bumper profits. To end this chilling profiteering, we have to break the big six's grip over our energy."

It will also heap more pressure on both the government and Ofgem, who have been accused of standing by as the big six suppliers profit at their customers' expense.

Last October SSE, which supplies 9.6m households with gas and electricity, raised domestic energy prices by 9% to coincide with the start of the coldest and longest winter of recent years. The company said on Wednesday that average household gas consumption in the UK rose by 21% last year, while electricity consumption was 5% higher.

The retail business helped drive adjusted profits before tax for the group ? which includes SSE's networks and wholesale units ? up 5.6% to ?1.4bn.

The company did, however, write down the value of certain investments by almost ?400m and was hit with charges related to claims from outages in prior years, while movements in derivative contracts dented profits by around ?200m. That left total profits before tax at ?601m for the year.

SSE upped its full-year dividend by 5.1% to 84.2p. It added that it will maintain annual dividend increases above inflation ? as measured by the retail prices index ? this year and beyond. Data out on Tuesday showed annual RPI fell from 3.3% to 2.9% last month.

The company confirmed that chief executive Ian Marchant would step down at the end of next month, after a decade at the helm of the company. He will be replaced by his deputy, Alistair Phillips-Davies.

? You can compare and switch energy tariffs with the Guardian's Money Deals service

Source: http://www.guardian.co.uk/business/2013/may/22/sse-retail-profits-rise-scottish-southern-electricity?CMP=twt_fd

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