SSE defends profits surge of 40 per cent after hiking prices
Following stints with Reuters and the Press Association, Martin Hickman joined The Independent as a news editor in 2001. He became the Consumer Affairs Correspondent in September 2005 and has run the paper's trenchant campaigns on packaging, bank charges and factory-farmed chicken. He writes on subjects as diverse as food, finance, energy and fashion. With Tom Watson, he is author of a new book on the phone hacking scandal, Dial M for Murdoch - News Corporation and the Corruption of Britain.
Thursday 15 November 2012
The energy supplier SSE angered consumer groups yesterday by revealing a near 40 per cent surge in profits, weeks after slapping an extra £100 on fuel bills.
Half-year profits at the company, whose Southern Electric, Swalec and Scottish Hydro brands have 5 million customers, jumped 38 per cent to £397m – up £110m.
SSE raised its prices by 9 per cent in October, taking its average duel fuel bill to £1,354, £260 more than in January 2011. Then, it blamed higher wholesale, distribution and environmental costs.
Yesterday it sought to win over the public by saying that only 8 per cent of profits came from its residential supply business.
Richard Lloyd, executive director of Which? called for the Government to set up an independent review into recent price increases. He said: "Without greater scrutiny of energy prices, consumers simply will not believe that they're getting a good deal."
SSE, the UK's second-largest generator of electricity, posted its results just days after the City and energy regulators launched an investigation into allegations that energy traders manipulated wholesale prices.
Yesterday SSE said its profits were needed to reward investors, and said its margin on energy supply was 1.5 per cent. It also raised its dividend for shareholders by 5 per cent to 25.2p a share.
Lord Smith of Kelvin, SSE's chairman, said: "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."
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