SSE set for huge profit jump after hiking energy bills

 

Big Six energy supplier SSE has admitted that its customers have been leaving in droves after the hike in household price last year.

SSE said in a trading statement that it lost 250,000 accounts in the final nine months of 2013, with 190,000 leaving between October and December. Customers also used 4.3 per cent less electricity in the nine months and 9.5 per cent less gas.

The company was the first of the Big Six suppliers to increase prices, announcing in October it was raising bills by 8.2 per cent.

However, SSE said it still expects profits to grow by about 8.8 per cent to £1.54 billion in the year to March 31.

An SSE spokesman said: “The energy market is a competitive market and this shows that if prices are not competitive, customers will switch to other suppliers. For a short time SSE was the first energy supplier to increase prices and customers were lost as a result.”

However, since then other suppliers have put their prices up by more than SSE and customers are switching back, the spokesman added.

SSE said the expected profit increase should allow the company to increase its dividend by 3% this year, an announcement that is likely to fuel anger at rising energy bills.

The spokesman denied the company was profiteering, pointing out that the group’s retail division was loss-making for the first half of 2013, before the latest increase kicked in. During this period, however, SSE’s group profit was propped up by healthy earnings from its energy generation business.

Shares in SSE, which ended last year with 9.22 million customers across the UK and Ireland, increased by 7p to 1,324p.

SSE was also one of the last of the Big Six to pass on a reduction in prices after an agreement with the Government to reduce the amount of green levies on bills.

The firm has promised a 3.5 per cent reduction, which will come into effect from late March, and said today that it planned to cap energy prices for around a year after that.

SSE chief executive Alistair Phillips-Davies said: “I am very encouraged that this is a financial year in which the concerns of bill-payers have been put at the heart of the debate about how to meet the country’s energy needs.”

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