REG - SSE Plc - Preliminary Results for the year ended 31 March 25
21/05/2025 07:00
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RNS Number : 4968J SSE PLC 21 May 2025
SSE plc: Preliminary Results
for the year ended 31 March 2025
21 May 2025
At the heart of the clean energy transition
· Investment plan delivering value with adjusted Earnings Per Share
of 160.9p, in line with expectations:
§ Continuing strong financial and strategic performance from regulated
Networks businesses, despite the impact from named storms and unsettled
weather conditions.
§ Renewables capacity additions from Viking and a full year contribution from
Seagreen drove an 18% increase in output, despite variable weather conditions.
§ Thermal profitability normalised, in line with expectations; strong
performance from Energy Customer Solutions demonstrated its strategic
importance to the Group.
§ Record £2.9bn adjusted capital investment, of which ~90% was delivered
across Networks and Renewables.
§ Adjusted net debt and hybrid capital at £10.2bn, with 3.2x net debt /
EBITDA.
§ Recommend a final dividend of 43.0 pence taking full-year dividend to 64.2
pence or 7% increase on prior year.
· Evolving investment programme delivering in complex operating
environment:
§ Five-year investment expectations reduced by £3bn to around £17.5bn,
reflecting financial discipline in a changing macro environment across the
energy businesses and consent phasing in networks.
§ ~60% expected to be invested in regulated Networks, with ~30% allocated to
Renewables.
§ Construction continues on all three phases of Dogger Bank offshore wind
farm. On track with Phase A completion in the second half of 2025, with
>50% of turbines installed.
§ All major substation consents submitted for ASTI and LOTI transmission
projects, with remaining consents to be submitted in summer 2025. Construction
ongoing at Eastern Green Link 2 ASTI project.
§ Completion of £1bn+ combined investment in 443MW Viking onshore wind farm
in Shetland and associated subsea HVDC transmission cable, connecting the
islands to the GB grid for the first time.
§ Clearly defined pathway to delivering 2026/27 adjusted Earnings Per Share
of 175 - 200p.
Adjusted Reported
FINANCIAL SUMMARY
Mar 2025 Mar 2024 % mvmt Mar 2025 Mar 2024 % mvmt
Operating profit (£m) 2,419.2 2,426.4 - 1,962.2 2,608.2 (25%)
Profit before tax (£m)(1) 2,138.2 2,200.9 (3%) 1,850.9 2,495.1 (26%)
Earnings per share (p)(1) 160.9 160.9 - 108.2 156.7 (31%)
Investment, capital & acquisitions (£m) 2,910.4 2,476.7 18% 3,837.0 3,285.6 17%
Net Debt and Hybrid Capital (£bn)(2) (10.2) (9.4) 9% (9.5) (8.1) 17%
(1) Alternative Performance Measures have been simplified to no longer adjust
for interest on net pension assets, resulting in adjusted EPS increasing by
1.9 pence in 2024/25 and 2.4 pence in 2023/24.
(2) Reported net debt excludes equity accounted hybrid capital, see
Alternative Performance Measures Section.
Alistair Phillips-Davies, Chief Executive, said:
"SSE continues to prove the benefits of a portfolio that is built to withstand
risk and uncertainty and a strategy that is focused on creating sustainable
value. We have met our financial goals for the year and evolved our investment
plans to reflect the changing world around us - leaning into the opportunities
presented in networks and redoubling our capital discipline across our energy
businesses.
"We are particularly well placed to contribute to future energy systems in our
home markets built on renewables, networks and flexibility. This opportunity,
alongside our balance sheet strength and the increased proportion of
index-linked revenue we anticipate, gives us every confidence in our FY27
target of 175-200p earnings per share and sustainable growth to 2030 and
beyond."
Highlights: Focused on delivering value creation
Strong financial performance, underpinned by regulated networks and renewables
growth
· Regulated Networks and Renewables contributed around 90% of
adjusted operating profits, reflecting:
§ Strong operational performance from SSEN Transmission, with lower
profitability due to one-off true-up benefits in the prior year.
§ One-off cost recoveries through the regulatory price control for SSEN
Distribution, where operational performance was also strong in exceptional
storm conditions and variable weather.
§ Around 18% increase in output for SSE Renewables, reflecting increased
operational capacity combined with a hedged price environment around 30%
higher than the prior year.
§ In line with guidance, SSE Thermal and Gas Storage delivered £211.4m of
operating profit, reflecting a return towards lower spark spreads and lower
market volatility.
§ Energy Customer Solutions continued to see supply margins return to more
sustainable levels while delivering tariff reductions to customers in 2024/25
as energy prices stabilised.
· Reported operating profit of £1,962.2m includes exceptional
charges totalling £(309.7)m. The majority of this charge relates to a
£249.5m non-cash impairment of the Group's investment in the Southern Europe
Renewables pipeline. This impairment reflects sector-wide delays to permitting
and grid connections, which has meant the build-out has been slower than
originally planned.
· Adjusted net finance costs increased over the course of the year
reflecting the generally higher level of adjusted net debt and
interest-bearing non-recourse project financing in the year.
· Adjusted taxation rate decreased to 13.9%, driven by "full
expensing" capital allowance tax relief.
· Strength of balance sheet maintained alongside the strong
investment grade credit rating, with 91% of debt fixed at average cost of
3.99% and an average maturity of 5.6 years.
· We are closely monitoring developments in global trade tariff
arrangements, however given our diversified supply chains, we do not currently
anticipate any material impact on our business or financial results.
Disciplined approach to delivery, with focus on efficiency and competitiveness
· Full energisation of Shetland HVDC link and completion of
associated 443MW Viking wind farm both delivered in August 2024, representing
an investment of over £1bn.
· Construction commenced on Eastern Green Link 2 (EGL2), a 2GW
subsea HVDC being jointly delivered with National Grid, which is the UK's
single largest electricity transmission project.
· All major substation consents now submitted for ASTI and LOTI
transmission projects, with all remaining consents to be submitted in summer
2025, following the Scottish Government's 52-week decision target.
· Major distribution projects are accelerating, with framework
agreements worth ~£1.5bn having been agreed with delivery partners.
· Continuing to progress 3.6GW Dogger Bank offshore wind farm with
completion of Dogger Bank A expected in the second half of 2025. Construction
on Dogger Bank B progressing well, with all 95 monopiles installed, and blade
and turbine manufacturing at advanced stages. A second installation vessel has
been contracted and is expected to be on site in the second quarter of 2026.
Equity returns across all three phases remain comfortably in line with hurdle
rates.
· Completion of the 40MW Tummel Bridge hydropower station
refurbishment, whilst reaching a final investment decision to repower 45MW
Lochay hydropower station - extending both plants working life by at least 40
years.
· Success in the UK's sixth Contract for Difference auction (AR6)
with 130MW Cloiche onshore wind farm and success in Ireland's fourth Renewable
Electricity Support Scheme auction (RESS 4) with 60MW Drumnahough onshore wind
farm Joint Venture.
· Secured agreements in both the GB and Irish T-4 capacity auctions
at strong prices, with the SSE Thermal fleet now fully contracted out to 2029
and triggering an extension to GB fleet end of life assumptions.
· Entered commercial operations on Slough Multifuel - a 55MW Joint
Venture - ahead of schedule and backed by a 15 year capacity contract, with
steam produced being re-used on the Slough Trading Estate.
· Taken a final investment decision on 300MW Tarbert Next
Generation power station in Ireland, with construction commencing during 2025
ahead of planned completion by the end of 2027.
Key Performance Indicators
Financial Performance Adjusted Reported
Mar 2025 Mar 2024(1) Mar 2025 Mar 2024
Operating profit £m 2,419.2 2,426.4 1,962.2 2,608.2
EBITDA £m 3,349.3 3,295.6 2,738.3 3,333.1
Profit before tax £m 2,138.2 2,200.9 1,850.9 2,495.1
Earnings per share (EPS) pence 160.9 160.9 108.2 156.7
Full year dividend per share (DPS) pence 64.2 60.0 64.2 60.0
Investment, capital and acquisitions £m 2,910.4 2,476.7 3,837.0 3,285.6
Net debt and hybrid capital £m 10,186.7 9,435.7 9,513.9 8,097.8
SSEN Transmission RAV - £m ((100% basis)) 7,171 5,676
SSEN Distribution RAV - £m 5,737 5,301
SSE Total Electricity Networks RAV - £m ((100% basis)) 12,908 10,977
1 Comparative financial information has been restated, please see note 2.3 to
the summary financial statements
Performance against 2030 Goals Mar 2025 Sep 2024 Mar 2024
Cut carbon intensity by 80%
- Scope 1 GHG intensity (gCO(2)e/kWh) 218 207 205
Increase renewable energy output fivefold
- Renewable generation output (TWh)(1) 13.3 5.4 11.2
Enable low-carbon generation and demand
- Renewables connected in SSEN Transmission network area (GW) 10.9 10.6 9.3
Champion a fair and just energy transition
- Contribution to GDP UK (£bn / €bn)(2) 7.88/0.95 - 5.86/1.04(3)
- Jobs supported in UK and Ireland(2) 62,000/5,190 - 50,380/4,450(4)
1 Includes pumped storage, battery energy storage systems, biomass and
constrained-off wind in GB
2 Direct, indirect and induced Gross Value Added and jobs supported, from PwC
analysis
3 Figures for 2023/24 have been restated to reflect post year-end adjustments
to data
4 The methodology updated to align to published government multipliers and
savings rates where available also had a small impact on the results
Safety Performance Mar 2025 Sep 2024 Mar 2024
Total Recordable Injury Rate per 100k hours (SSE & contract partners) 0.16 0.16 0.20
Investor Timetable
2025 Annual Report and Sustainability Report published on sse.com 13 June 2025
AGM and Q1 Trading Statement 17 July 2025
Final ex-dividend date 24 July 2025
Record date 25 July 2025
Scrip reference pricing days 24-30 July 2025
Scrip reference price confirmed and released via RNS 31 July 2025
Final date for receipt of scrip elections 21 August 2025
Final dividend payment date 18 September 2025
Notification of Closed Period Around 30 September 2025
Interim results for the six months ended 30 September 2025 12 November 2025
Contact Details
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Media media@sse.com (mailto:media@sse.com) + 44 (0)345 0760 530
MHP Group james.mcfarlane@mhpgroup.com (mailto:james.mcfarlane@mhpgroup.com) + 44 (0)7584 142 665
Disclaimer
This financial report contains forward-looking statements about financial and
operational matters. These statements are based on the current views,
expectations, assumptions, and information of management, and are based on
information available to the management as at the date of this financial
report. Because they relate to future events and are subject to future
circumstances, these forward-looking statements are subject to unknown risks,
uncertainties and other factors which may not have been in contemplation as at
the date of the financial report. As a result, actual financial results,
operational performance, and other future developments could differ materially
from those envisaged by the forward-looking statements. Neither SSE plc nor
its affiliates assumes any obligations to update any forward-looking
statements.
SSE plc gives no express or implied warranty, representation, assurance or
undertaking as to the impartiality, accuracy, completeness, reasonableness or
correctness of the information, opinions or statements expressed in the
financial report or any other information (whether written or oral) supplied
as part of it. Neither SSE plc, its affiliates nor its officers, employees or
agents will accept any responsibility or liability of any kind for any damage
or loss arising from any use of this financial report or its contents. All and
any such responsibility and liability is expressly disclaimed. In particular,
but without prejudice to the generality of the foregoing, no representation,
warranty, assurance or undertaking is given as to the achievement or
reasonableness of any future projections, forward-looking statements about
financial and operational matters, or management estimates contained in the
financial report.
This financial report does not constitute an offer or invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any SSE plc
shares or other securities, or of any of the businesses or assets described in
the financial report, and the information contained herein cannot be relied
upon as a guide to future performance.
Definitions
The financial information set out in this Preliminary Results Statement has
been prepared in accordance with the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority and UK adopted International
Accounting Standards.
In order to present the financial results and performance of the Group in a
consistent and meaningful way, SSE applies a number of adjusted accounting
measures or alternative performance measures ("APMs") throughout this
financial report. These adjusted measures are used for internal performance
management and are believed to present the underlying performance of the Group
in the most useful manner for ordinary shareholders and other stakeholders.
The definitions SSE uses for adjusted measures are explained in the
"Alternative Performance Measures" section before the Summary Financial
Statements. SSE continues to prioritise the monitoring of developing practice
in the use of APMs, ensuring the financial information in its results
statements is clear, consistent, and relevant to the users of those
statements. During the year the Group simplified its adjusted profit metrics
by removing the adjustment for interest on net pension assets/liabilities
valued under IAS 19 "Employee Benefits". There have been no other changes to
the way the Group calculates its APMs in the current year.
For the purpose of calculating the "Net Debt to EBITDA" metric, "Net Debt"
represents the group's "Adjusted Net Debt and Hybrid Capital" APM and "EBITDA"
represents the full year group "Adjusted EBITDA" APM and including a further
adjustment to remove the proportion of "Adjusted EBITDA" from equity-accounted
Joint Ventures which relates to project financed debt.
Online information
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Management presentation webcast and teleconference
SSE will present its preliminary results for the year ended 31 March 2025 on
Wednesday 21 May at 10:00am BST. The presentation will be available to replay.
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Strategic overview
At the heart of the clean energy transition
The past year has shown yet again the value that comes from a diverse and
resilient business mix and a strategy that aligns with the electrification and
decarbonisation of the economy. We have delivered on our financial commitments
for the year, delivering adjusted earnings per share of 160.9p and investing a
record £2.9bn in large capital projects. Electricity networks and renewables
continue to be the twin pillars of disciplined growth for us, with each
contributing in excess of £1bn in operating profit for the first time in
SSE's history. These businesses, alongside the system-balancing flexibility we
can offer, are the principal focus of a proven strategy that is creating
meaningful value while addressing the need to provide clean, secure,
affordable energy.
With two years to go on our five-year clean power investment plan, the list of
delivery milestones grows. In the past year we celebrated completion of Viking
onshore wind farm, the pioneering Shetland HVDC link, and the Slough
multi-fuel plant. At the same time, work has progressed on major projects like
Dogger Bank offshore wind farm and the Eastern Green Link 2 HVDC link. This
year of delivery is the result of the work done by SSE's employees and
contractor partners, and the Board and leadership team are appreciative of
those efforts during what has been a period of internal change as we have
responded to our operating environment. Keeping those people out of harm's way
is central to our core safety value, so to have reported a combined Total
Recordable Injury Rate at its lowest in three years is particularly
encouraging.
Our plans have evolved over time, using the optionality we have across a
business mix that allows us to react to external factors and pivot to where we
see value. As transmission investment opportunities emerged, we steadily
upweighted our capital allocation in that area. Now, in response to the impact
on growth rates from factors like a changing macro environment and delays to
policy and planning, we are reducing spending on our energy businesses and
evolving our internal structures to sharpen our focus on controllable costs
and efficiencies. Whilst growth rates vary across the Group, our portfolio of
businesses across renewables, networks and flexibility continue to show
long-term opportunities to create value. SSEN Transmission has immediate
visibility of significant RAV growth as it delivers the grid upgrades so
critical to decarbonisation. In SSEN Distribution, increasing electrification
requires more investment in modernised, digital grids that can optimise supply
and demand.
Whilst we upweight investment in regulated networks, we are maintaining our
disciplined approach to developing our SSE Renewables pipeline, retaining
enviable options for later in the decade whilst prioritising near-term
delivery of value creating capacity additions like Dogger Bank. In SSE
Thermal, the value to the system of our existing fleet in providing essential
flexibility in support of renewables is becoming ever clearer, while our new
development pipeline offers essential back-up solutions in carbon capture,
hydrogen and conventional plant that is ready for decarbonisation when policy
enables it. And in SSE Energy Markets and Energy Customer Solutions, we have
vital routes to market that help us to optimise options across the Group.
The publication of this results statement is my last as Chief Executive, and I
am proud of what we have achieved over the past 12 years. In that time the
Company has evolved from a domestic energy supplier into a world-class
developer, builder and operator of critical national infrastructure. That
evolution continues with the appointment of Martin Pibworth as my successor.
Having joined SSE in 1998, Martin's knowledge of SSE and the energy sector is
second to none, and I have full confidence in his ability to take the Company
forward.
SSE will continue to offer transparent, high-quality earnings growth that
investors can have confidence in. The Company will continue to leverage the
array of options at its disposal in delivery of a climate-focused strategy.
And it will continue to grow and create sustainable value for shareholders and
society for decades to come.
Alistair Phillips-Davies
Chief Executive
SSE plc
Group Financial Review
Financial performance for the year ended 31 March 2025
In order to present the financial results and performance of the Group in a
consistent and meaningful way, SSE applies a number of adjusted accounting
measures throughout this financial report. These adjusted measures are used
for internal management reporting purposes and are believed to present the
underlying performance of the Group in the most useful manner for shareholders
and other stakeholders. The definitions SSE uses for adjusted measures provide
a consistent basis to assess performance and are explained - including a
detailed reconciliation to reported measures - in the Alternative Performance
Measures section of this document.
Key Financial Metrics (£m) Adjusted Reported
Mar 2025 Mar 2024(1) Mar 2025 Mar 2024(1)
Segmental operating profit / (loss)
SSEN Transmission 322.5 419.3 430.0 559.1
SSEN Distribution 736.0 272.1 736.0 272.1
Electricity networks total 1,058.5 691.4 1,166.0 831.2
SSE Renewables 1,038.8 833.1 617.6 630.3
SSE Thermal 248.5 752.5 240.8 660.8
Gas Storage (37.1) 82.8 (45.5) (42.2)
Thermal Total 211.4 835.3 195.3 618.6
SSE Business Energy 32.7 55.2 32.2 55.2
SSE Airtricity (NI and ROI) 159.4 95.0 157.0 94.5
Energy Customer Solutions Total 192.1 150.2 189.2 149.7
SSE Energy Markets 30.0 37.5 (42.9) 588.6
Neos Networks (22.2) (32.3) (33.3) (116.1)
Corporate unallocated (89.4) (88.8) (129.7) (94.1)
Total operating profit 2,419.2 2,426.4 1,962.2 2,608.2
Net finance (costs) / income (281.0) (225.5) (111.3) (113.1)
Profit before tax 2,138.2 2,200.9 1,850.9 2,495.1
Tax charge (296.4) (371.0) (518.0) (610.7)
Effective tax rate (%) 13.9 16.9 29.4 25.6
Profit after tax 1,841.8 1,829.9 1,332.9 1,884.4
Less: hybrid equity coupon payments (73.7) (73.1) (73.7) (73.1)
Less: profits attributable to non-controlling interests - - (69.8) (100.8)
Profit after tax attributable to ordinary shareholders 1,768.1 1,756.8 1,189.4 1,710.5
Earnings Per Share (pence) 160.9 160.9 108.2 156.7
Number of shares for basic/reported and adjusted EPS (million) 1,099.2 1,091.8 1,099.2 1,091.8
Shares in issue at 31 March (million)(2) 1,106.3 1,093.4 1,106.3 1,093.4
1 Comparative financial information has been restated, please see note 2.3 to
the Summary Financial Statements
2 Excludes Treasury shares of 4.9m in March 2025 and 2.8m in March 2024
Segmental EBITDA results are included in note 6.3 to the Summary Financial
Statements. Further detail on certain key financial metrics is included within
the Supplemental Financial Information. For detailed Business Unit financial
performance commentary, please refer to the Business Operating Review.
Group Operating Profit
The Group's balanced business mix delivered another strong financial
performance in the year, despite continued wider economic turbulence and the
expected normalisation of commodity price volatility.
Within this, the adjusted operating profit contribution from Networks and
Renewables increased on prior year, contributing a combined 87% of the total
adjusted operating profit compared to 63% in the prior year. This increase
reflects the strong operating performance and continued investment in both
businesses this year, in addition to one-off cost recoveries in networks
through the regulatory price control. As expected at the start of the year,
the significant decrease in market spark spread price volatility meant that
adjusted operating profits from the flexible Thermal business declined 75% on
the prior year. Finally, Energy Customer Solutions continued to see supply
margins return to more sustainable levels whilst delivering tariff reductions
to customers as energy prices stabilised.
Reported operating profit, in addition to the movements above, includes both
the net re-measurement on forward contract derivatives under IFRS 9 as well as
exceptional items and other financial items which are excluded from adjusted
results on the basis they are materially non-recurring, uncontrollable or
exceptional. Reported operating profitability decreased by (25)%, mainly as a
large net-remeasurement gain on forward contract derivatives in the prior year
moved to a small net-remeasurement loss in the current year. These
remeasurements are unrelated to underlying operating performance. In addition,
the current year result reflected exceptional charges totalling £(309.7)m,
mainly comprising a £(249.5)m non-cash impairment of the Group's investment
in the Southern Europe Renewables pipeline. This impairment reflects
sector-wide delays impacting permitting and grid connections, which has meant
the build-out of this platform has been slower than originally planned.
Profit after tax and Earnings Per Share
Adjusted profit after tax was broadly flat year on year, reflecting an
increase in net finance costs of 25% which was offset by a decrease in
taxation of 20%. Adjusted net finance costs increased over the course of the
year reflecting the generally higher level of adjusted net debt in the year,
combined with a full year's interest charge on the non-recourse project
financing relating to Seagreen offshore wind farm which was commissioned
mid-way through the prior year. The decrease in the adjusted taxation charge
was driven by "full expensing" capital allowance tax relief available on SSE's
record levels of capital investment which reached £2.9bn this financial year.
Reported profit after tax includes the tax effect from the adjustments made to
profit metrics as detailed in the previous section, as well as deferred tax
arising as a result of differences in accounting and tax bases that give rise
to potential future accounting credits or charges. Deferred tax for the Group
increased by 39% on prior year, mainly due to the increase in the Group's
capital investment programme.
Reflecting the movements above, adjusted Earnings Per Share was flat year on
year at 160.9 pence with reported EPS decreasing by 31% to 108.2 pence.
Final dividend
Dividend per Share (pence) Mar 2025 Mar 2024
Interim Dividend 21.2 20.0
Final Dividend 43.0 40.0
Full Year Dividend 64.2 60.0
SSE believes that dividends should be sustainable and based on earnings
performance, while also enabling the longer-term growth prospects of its
assets and operations. To that end, the existing dividend plan to 2026/27 is
designed to balance income to shareholders with the appropriate funding for an
accelerated growth plan that will ultimately create greater value and total
return for shareholders over the long term.
In line with that dividend plan and reflecting financial performance in the
year, SSE has announced a final dividend of 43.0 pence for payment on 18
September 2025. This amounts to a 2024/25 full year dividend of 64.2 pence,
representing an increase of 7% on the prior year.
Capital expenditure programme
Adjusted Investment and Capex Summary Mar 2025 Mar 2025 Mar 2024
Share % £m £m
SSEN Transmission (net of 25% non-controlling interest) 33% 953.5 595.6
SSEN Distribution 22% 635.8 505.1
Regulated networks total 55% 1,589.3 1,100.7
SSE Renewables 34% 1,001.8 1,097.1
SSE Thermal 6% 183.1 109.2
Gas Storage - 0.7 0.8
Thermal Energy Total 6% 183.8 110.0
Energy Customer Solutions 3% 80.0 99.4
SSE Energy Markets - 8.7 9.1
Corporate unallocated 2% 46.8 60.4
Adjusted investment and capital expenditure 100% 2,910.4 2,476.7
Adjusted investment, capital and acquisitions expenditure 100% 2,910.4 2,476.7
1 Comparative financial information has been restated, please see note 2.3 to
the Summary Financial Statements
During the year ended 31 March 2025, SSE's adjusted investment, capital and
acquisitions expenditure totalled £2,910.4m, compared to £2,476.7m in the
prior year. Investment in the reporting year was driven mainly by SSE's
renewables and electricity networks divisions, with limited deployment of
capital in thermal and other businesses, and no acquisitions expenditure.
In SSEN Transmission, £953.5m net capex was delivered including £103m on the
EGL2 subsea HVDC being jointly delivered with National Grid, as onshore works
get underway, and £85m on the Skye reinforcement as substation enabling works
commence ahead of the overhead line consent decision. Construction has also
commenced on the Orkney High Voltage Alternating Current system where £77m
net capex was delivered and £86m was invested in Argyll and Kintyre after
final planning approvals for the 275kV upgrade were granted in the year.
In SSEN Distribution, capital investment of £635.8m marks an increase of 26%
compared to the prior year as the business advances into year two of its
ambitious RIIO-ED2 plan and local transformation programme. In the north,
£221m was invested, with delivery of subsea cable projects from Orkney to
Shapinsay and Jura to Islay continuing, alongside ongoing programmes to
replace aging assets across the region. In the south, expenditure of £415m
included ongoing works at Iver in West London and the Bramley-Thatcham
reinforcement near Reading, in addition to the Leamington Park Network Upgrade
and again alongside ongoing programmes to replace aging assets.
SSE Renewables invested a total of £1,001.8m during the year. In onshore wind
this included £56m at Viking wind farm on Shetland which was completed during
August 2024 and £47m at Yellow River wind farm in Ireland which is
approaching completion. In offshore wind, progress has continued at Dogger
Bank A, with £176m of equity and shareholder loans drawn to support
construction ahead of completion expected in the second half of 2025. Across
the battery and energy storage system (BESS) portfolio, £81m was invested at
Ferrybridge (West Yorkshire) where completion is expected in 2025, and £132m
and £44m invested at the Monk Fryston and Fiddlers Ferry projects
respectively with completion expected at both sites during 2026.
Financial Outlook
Financial outlook for 2025/26
SSE's balanced portfolio of assets across electricity networks, renewables and
flexible thermal generation provides a diverse and resilient business mix,
with a high level of exposure to a strong, predictable regulatory environment
that continues to create sustainable value despite a changing macro
environment.
Reflecting this, the Group has set out the following expectations for the
forthcoming year:
· SSEN Transmission - it is expected that adjusted operating profit
will be more than 1.5 times higher than 2024/25, reflecting increased allowed
revenue generated by continued investment growth in this business.
· SSEN Distribution - anticipates that adjusted operating profit
will be less than half of 2024/25, as allowed revenue is expected to decrease
by around £400m with the reversal of one-off inflationary cost recoveries.
· SSE Renewables - is expected to deliver higher adjusted operating
profit than 2024/25, as increased capacity additions such as Dogger Bank A and
a full year contribution from Viking more than offset the impact from lower
power prices.
· SSE Thermal and Gas Storage - with the step up in contracted
Capacity Market payments starting in financial year 2026/27, it is expected
that the adjusted operating profit for these businesses will be similar to
2024/25, assuming similar market conditions.
· Energy Customer Solutions - as income from legacy wind farm
contracts starts to unwind, it is expected that the adjusted operating profit
for this business will be lower than 2024/25.
These expectations are subject to normal weather conditions, current market
conditions and plant availability.
Consistent with the approach taken in prior years, SSE will look to give
specific adjusted Earnings Per Share guidance later in the financial year.
In line with SSE's existing dividend plan to 2026/27, it is expected that the
dividend will increase by between 5 - 10% this financial year. However, in
order to simplify the application of this commitment, the Group will move to a
more formulaic approach to calculating interim dividends. Reflecting the
inherent seasonality of the business, the interim dividend will be calculated
as one-third of the prior year full dividend. Therefore, for 2025/26, the
interim dividend is expected to be 21.4 pence, being one-third of the 2024/25
full year dividend of 64.2 pence. The Board will continue to recommend the
final dividend in May, as part of the Full-year Results Statement, which will
reflect an increase of between 5 - 10%.
Capital expenditure and investment continues to increase, as more projects
enter construction. Full year capex is expected to continue to increase to
over £3.0bn, with the net debt to EBITDA ratio expected to be towards the
middle of the 3.5 - 4.0x targeted range across the five-year investment plan
and well within a strong investment grade.
Net Zero Acceleration Programme Plus
An evolving investment programme
When SSE set out its first "Net Zero Acceleration Programme" in November 2021,
it recognised the significant optionality the Group had within its business
mix across the value chain and the need to flex investment as opportunities
evolved. This evolution has been evident throughout each iteration of that
investment plan, as the Group has steadily upweighted its investment in
regulated electricity networks to reflect the growing opportunities there.
However, the Group's investment plans have not been immune to the changing
macroeconomic environment and wider delays to the planning processes which
have been seen over the last twelve months. Reflecting this investment
landscape, the Group today announces a reduction in the overall size of the
capital investment plan to around £17.5bn over the five years to 31 March
2027. Around 90% of this investment plan is currently committed, with the
remainder subject to delay or potentially even cancellation if the right
investment conditions do not emerge.
Updated Plan Prior Plan Reduction
SSEN Transmission £7.0bn £7.5bn (£0.5bn)
SSEN Distribution £3.5bn £3.5bn -
SSE Renewables £5.5bn £7.0bn (£1.5bn)
SSE Thermal & Other £1.5bn £2.5bn (£1.0bn)
Total £17.5bn £20.5bn (£3.0bn)
As noted above, the majority of this reduction is in our energy markets
focused businesses with the overall investment plan continuing to reflect an
upweighting towards regulated electricity networks:
· SSEN Transmission (~40% or ~£7.0bn) to deliver the RIIO-T2
baseline investment programme in addition to part of the eleven LOTI and ASTI
projects which have regulatory approval and are critical to removing existing
constraints within the electricity transmission network. This investment is
expected to increase gross RAV to between £12 - 13bn by the end of 2026/27.
· SSEN Distribution (~20% or ~£3.5bn) in delivery of its RIIO-ED2
investment programme which continues to progress at pace. This business
expects RAV to increase to around £7bn by the end of 2026/27.
· SSE Renewables (~30% or ~£5.5bn) to deliver its existing
construction programme. With the business continuing to focus on financial
discipline and selective renewables growth only where it is value accretive,
it is reducing its capacity targets to ~7GW installed capacity by the end of
2026/27 with ~1GW under construction at that time.
· SSE Thermal and other businesses (~10% or ~£1.5bn) of which
around 70% has been invested to date on projects such as Keadby 2 and Slough
Multifuel, with the remainder largely comprising maintenance capex and
technological investment.
In conjunction with this reduction in investment, and in line with SSE's
commitment to capital and operational discipline, the Group commenced an
operating and efficiency review, intended to ensure that SSE has the right
structures, resourcing and accountabilities to maximise the growth
opportunities ahead.
With over 90% of the revised investment plan expected to be invested in
electricity networks and renewables, the substantial majority is focused on
projects that support SSE's 2030 Goals which are linked to its most
highly-material UN Sustainable Development Goals (SDGs) and aligned to the
Technical Screening Criteria of the EU Taxonomy.
Balance sheet strength and stability
A core part of SSE's success has been its ability to realise value from
disposals, create sustainable earnings growth and raise capital at highly
attractive terms. Over the plan to date, more than £4bn of long-term debt has
been issued at attractive, fixed coupons despite volatile market conditions.
The Group continues to target a range of between 3.5 - 4.0x net debt / EBITDA
over the course of the investment plan to 2026/27, reaching around the top end
of that range in the final year.
Significant additional funding optionality remains available to the Group out
to FY27, with strong investment grade credit ratings providing further
significant net debt capacity, access to around £2bn of additional hybrid
borrowing which continues to increase over time, a portfolio of capital
recycling options and partnering opportunities which include the option for a
minority stake sale in SSEN Distribution and finally the ability to
continually flex investment across businesses. While full optionality on
sources of funding remains, any future funding decision will be based on the
option that creates maximum value for shareholders.
Commitment to delivering earnings growth and dividend plan
After considering the Group's reduced investment plan to 2026/27, in addition
to the current and forecasted market conditions, SSE continues to be highly
confident about reaching its 175 - 200p adjusted Earnings Per Share guidance
range for 2026/27. This confidence reflects an increased level of clarity on
revenue growth including:
· Electricity networks, where in-flight investments are expected to
grow the regulatory asset base by ~50% over the next two years to around
£20bn gross, driving increasing allowed revenues under the regulatory price
controls;
· Renewables, where output is expected to grow by ~40% or around
6TWh through delivery of under construction projects such as Dogger Bank
phases A and B in addition to full year contributions from other projects such
as Viking and Yellow River. The Group's hedging approach has already locked in
over two-thirds of the expected merchant exposure in that financial year; and
· Secured capacity market payments across flexible thermal and
hydro renewables due to increase by around £150m in 2026/27 from 2025/26 -
equivalent to an increase on adjusted earnings per share of around 10 pence -
with a further around £150m increase secured for 2027/28.
Reflecting the continued confidence in delivering this sustainable earnings
growth, the Group continues to target dividend increases of between 5 to 10%
per year across 2025/26 and 2026/27. This dividend plan retains the scrip
dividend option for shareholders, with a 25% cap on take-up implemented (if
necessary) by means of a share buy-back.
Supplemental Financial Information
Changes to presentation and prior year adjustments
During the year, the Group has restated prior year segmental disclosures as
previously announced and simplified adjusted profit metrics as set out below.
Restructuring of SSE Enterprise
SSE Enterprise has long been the incubator of new propositions for SSE,
unlocking a number of new commercial opportunities including behind-the-meter
solar and battery and energy optimisation services. SSE commenced a
restructuring of this business in September 2024 to build an enhanced platform
for growth and, following completion of this process, structural changes have
now been made to incorporate the constituent parts of the business into other
areas of the SSE Group as follows:
· SSE Thermal has taken responsibility for the Slough, Heat and
Power business;
· SSE Business Energy has taken responsibility for private electric
networks and businesses aligned with the provision of low carbon energy
solutions to customers; and;
· SSE Energy Markets has taken responsibility for energy
optimisation services.
Comparative segmental financial information has been restated to reflect this
restructuring, with the impact detailed in note 2.3 of the Summary Financial
Statements.
Alternative Performance Measures - interest on net pension assets/liabilities
In prior years, the Group's Alternative Performance Measures (APMs) excluded
the non-cash interest credit or charge relating to defined benefit pension
schemes valued under IAS 19 "Employee Benefits". This adjustment is now deemed
unnecessary since the pension interest adjustment is less volatile and
immaterial to the Group.
Comparative APMs have been restated to remove this adjustment, which increases
adjusted profit before tax by £26.2m and adjusted Earnings Per Share by 2.4
pence in the year ended 31 March 2024. For the year ended 31 March 2025, the
equivalent interest on net pension assets was £20.7m and increased adjusted
EPS by 1.9 pence.
There have been no other changes to the way the Group calculates its APMs in
the current year.
Exceptional items and certain re-measurements
Exceptional items
In the year ended 31 March 2025, SSE recognised a net exceptional charge
within continuing operations of £(309.4)m before tax. The following table
provides a summary of the key components included in the net charge:
Exceptional (charges) / credits Total
within continuing operations £m
Southern Europe Renewables Pipeline impairment (249.5)
Enerveo impairment (13.5)
Restructuring costs (46.7)
Other 0.3
Total exceptional charge (309.4)
Note: The definition of exceptional items can be found in Note 4.2 of the
Summary Financial Statements.
The detail behind the exceptional items noted above is contained within Note
7.1 of the Summary Financial Statements.
Group-wide operating model and efficiency review
During the year, in line with SSE's commitment to capital and operational
discipline, the Group commenced an operating model and efficiency review,
intended to ensure that SSE has the right structures, resourcing and
accountabilities to maximise the growth opportunities ahead. This review
recognises that the timing, pace and returns from investment in each business
will be different, reflecting both the changing macroeconomic environment as
well as other external factors such as policy development, regulatory reform
and consenting delays.
Whilst the first phase of this review is expected to complete by the end of
June 2025, a number of efficiency and cost control measures have already been
taken across the Group and most notably within the Corporate, Energy Customer
Solutions and SSE Renewables businesses.
These measures have been taken to improve operational efficiency, increase
organisational competitiveness and rebalance those businesses for future
growth. At present, we anticipate that targeted measures could result in
around £100m of annual recurring efficiencies across the Group.
Certain re-measurements
Certain re-measurements Total
within continuing operations £m
Operating derivatives (including share from jointly controlled entities net of (70.1)
tax)
Commodity stocks held at fair value (8.4)
Financing derivatives 12.8
Total net re-measurement charge (65.7)
Operating derivatives
SSE enters into forward purchase contracts (for power, gas and other
commodities) to meet the future demands of its energy supply businesses and to
optimise the value of its generation assets. Some of these contracts are
determined to be derivative financial instruments under IFRS 9 and as such are
required to be recorded at their fair value as at the date of the financial
statements.
SSE shows the change in the fair value of these forward contracts separately
as this mark-to-market movement does not reflect the realised operating
performance of the businesses. The underlying value of these contracts is
recognised as the relevant commodity is delivered, which for the large
majority of the position at 31 March 2025 is expected to be within the next 6
- 18 months.
The change in the operating derivative mark-to-market valuation was a
£(70.1)m negative movement from the start of the year, reflecting a £(49.0)m
negative movement on fully consolidated operating derivatives combined with a
£(21.1)m negative share of movement on derivatives in jointly controlled
entities, net of tax.
The negative movement of £(49.0)m on fully consolidated operating derivatives
includes:
· Settlement during the year of £(141.9)m of previously net
"in-the-money" contracts in line with the contracted delivery periods; and
· A net mark-to-market re-measurement of £92.9m on unsettled
contracts including affiliate CfDs, entered into in line with the Group's
stated approach to hedging. This mark-to-market re-measurement reflects the
reduced volatility seen in commodity markets during the year.
As in prior years, the reported result does not include re-measurement of 'own
use' hedging agreements which do not meet the definition of a derivative
financial instrument under IFRS 9 "Financial Instruments".
Commodity stocks held at fair value
Gas inventory purchased by the Gas Storage business for secondary trading
opportunities is held at fair value with reference to the forward month market
price. As trading churn towards the financial year end has combined with
relative stability in gas prices, the book value is broadly aligned with the
fair value.
However, whilst this assessment considers the net change in fair value of
physical gas inventory held at the year end, it does not take into account any
positive or negative mark-to-market movement on forward contracted sales.
Therefore, similar to derivative contracts held at fair value, SSE does not
expect that any valuation movement will reflect the final result realised by
the business.
Financing derivatives
In addition to the movements above, a positive movement of £12.8m was
recognised on financing derivatives in the year, including mark-to-market
movements on cross-currency swaps and floating rate swaps that are classed as
hedges under IAS 39. These hedges ensure that any fair value movement in net
debt is predominantly offset by a movement in the derivative position. The
positive movement was primarily driven by a Sterling strength on non-hedge FX
and cross currency swap contracts.
These re-measurements are presented separately as they do not represent
underlying business performance in the year. The result on financing
derivatives will be recognised in adjusted profit before tax when the
derivatives are settled.
Hedging position
The long-established approach to hedging followed by SSE looks to generally
reduce its broad exposure to commodity price variation in advance of delivery.
SSE continues to monitor market developments and conditions and periodically
alters its hedging approach in response to changes in its exposure profile.
A summary of the hedging position for each of SSE's market-based businesses is
set out below.
SSE Renewables - GB wind and hydro:
Energy output hedges are progressively established through the forward sale of
either:
§ Electricity - where market depth and liquidity allow;
§ Gas and carbon equivalents - recognising that spark spread exposures
remain; or
§ Gas equivalents only - recognising that carbon and spark spread exposures
remain.
This approach reflects that certain energy products have lower available
forward market depth and liquidity. Whilst some basis risk or commodity
exposure will remain, it facilitates the reduction of SSE Renewables' overall
exposure to potentially volatile spot market outcomes.
The table below notes both the proportion of hedges and prices of those hedges
for electricity and for gas alone. Due to market liquidity in later periods,
there are no gas and carbon equivalent hedges in place.
2024/25 2025/26 2026/27 2027/28
Wind
Total energy output volumes hedged - TWh 6.4 8.6 8.2 1.7
- Hedge in electricity & equivalents - TWh 4.1 4.6 3.1 1.2
- Electricity hedge price - £MWh £91 £87 £75 £68
- Hedge in Gas - TWh 2.3 4.0 5.1 0.5
- Gas hedge price - £MWh £122 £77 £58 £50
Hydro
Total energy output volumes hedged - TWh 2.9 3.2 2.7 0.6
- Hedge in electricity & equivalents - TWh 1.8 1.6 1.0 0.4
- Electricity hedge price - £MWh £96 £86 £74 £68
- Hedge in Gas - TWh 1.1 1.6 1.7 0.2
- Gas hedge price - £MWh £120 £82 £57 £52
Note: where gas and carbon trades have been used as a proxy for electricity, a
constant 1 MWh:69.444 th and 1MWh:0.3815 te/MWh conversion ratio between
commodities has been applied. These same ratios have been used to convert
underlying commodity prices into electricity £MWh and therefore no
assumptions have been made on either spark or carbon.
The table above excludes any volumes and income under separate contracts such
as CfDs, ROCs and Balancing Mechanism activity.
No hedging activity is undertaken for assets in early-stage construction, with
hedging activity gradually built up over the construction period as greater
certainty over operational dates is received.
SSE's established approach seeks to minimise the volumetric downside risk for
renewable energy output by targeting a hedge of less than 100% of its
anticipated wind energy output for the coming 12 months. The targeted hedge
percentage is reviewed and adjusted as necessary to reflect any changes in
market and wind capture insights.
Forward hedges for both wind and hydro are progressively established over a
36-month period, although the extent of hedging activity will depend on the
available market depth and liquidity. Target hedge levels are achieved through
the forward sale of either electricity or a combination of gas or carbon
equivalents as outlined above. When gas-and-carbon hedges are converted into
electricity hedges a "spark spread" is realised which can lead to changes in
the average hedge price expected. This can increase or decrease the previously
published average hedge price or decrease it. Likewise, when gas hedges are
subsequently converted into electricity hedges ahead of delivery, a
carbon-and-spark spread value is realised which will also lead to changes in
the average hedge price expected.
SSE Thermal:
Hedging for the flexible thermal fleet is by its nature dynamic, changing as
market values vary with a constant process of re-optimisation to accrue future
value for the Thermal fleet. At negative spark spreads this hedge volume is
therefore likely to be very low; and at higher prices the hedge will be much
larger.
At all times the Thermal portfolio offers the wider group protection from
price spikes, renewables shortfall or asset availability issues and therefore
has material risk management value to the Group.
Gas Storage:
The assets are commercially operated to optimise value arising from changes in
the spread between summer and winter prices, market volatility and plant
availability.
SSE Business Energy:
Sales to contract customers are hedged: at point of sale for fixed contract
customers; upon instruction for flexi contract customers; and on a rolling
hedge basis for tariff customers.
SSE Energy Markets:
This business provides the route to market and manages the execution for all
of SSE's commodity trading outlined above (spark spread, power, gas and
carbon). This includes monitoring market conditions and liquidity and
reporting net Group exposures. The business operates under strict position
limits and VAR controls.
There is some scope for position-taking to permit this business to manage
around shape and liquidity and providing market insight whilst taking
optimisation opportunities. This is contained within a total daily VAR limit
of £9m.
Financial management and balance sheet
Debt metrics Mar 2025 Sep 2024 Mar 2024
£m £m £m
Net Debt / EBITDA(1) 3.2x N/A 3.0x
Adjusted net debt and hybrid capital (£m) (10,186.7) (9,843.8) (9,435.7)
Average debt maturity (years) 5.6 6.3 6.4
Adjusted interest cover(2) 8.0x N/A 9.8x
Average cost of debt at year end (including all hybrid coupon payments) 3.99% 4.04% 3.90%
(1) Net debt represents the Group adjusted net debt and hybrid capital.
EBITDA represents the full year Group adjusted EBITDA, less £153.3m at March
2025 for the proportion of adjusted EBITDA from equity-accounted Joint
Ventures relating to project financed debt.
(2) Comparative financial information restated to reflect change to adjusted
net finance costs APM, please see note 2.3 to the Summary Financial Statements
Net finance costs reconciliation Mar 2025 Mar 2024(1)
£m £m
Adjusted net finance costs 281.0 225.5
Add/(less):
Lease interest charges (26.9) (25.8)
Notional interest arising on discounted provisions (27.2) (25.2)
Hybrid equity coupon payment 73.7 73.1
Adjusted finance costs for interest cover calculation 300.6 247.6
(1) Comparative financial information has been restated, please see note 2.3
to the summary financial statements
Principal Sources of debt funding Mar 2025 Sep 2024 Mar 2024
Bonds 60% 62% 58%
Hybrid debt and equity securities 16% 17% 18%
European investment bank loans 4% 4% 5%
US private placement 7% 7% 8%
Short-term funding 10% 7% 8%
Index-linked debt 3% 3% 3%
% of which has been secured at a fixed rate 91% 94% 93%
Rating Agency Rating Criteria Date of Issue
Moody's Baa1 'stable outlook' 'Low teens' Retained Cash Flow/Net Debt 17 January 2025
Standard and Poor's BBB+ 'stable outlook' About 18% Funds From Operations/Net Debt 20 December 2024
Maintaining a strong balance sheet
A key objective of SSE's long-term approach to balancing capital investment,
debt issuance and securing value and proceeds from disposals is by maintaining
a strong net debt/EBITDA ratio. SSE calculates this ratio based on a
methodology that it believes best reflects its activities and commercial
structure, in particular its strategy to secure value from partnering by using
Joint Ventures and non-recourse project financing.
SSE considers it has the capacity to reach a ratio of up to around 4.5x,
whilst remaining above the equivalent ratios required for a strong investment
grade credit rating.
Given the strength of the Group's balance sheet, the net debt/EBITDA ratio at
31 March 2025 was 3.2x. It is expected that this ratio will trend upwards to
around 4.0x, as the Group delivers on its ~17.5bn investment plan to 31 March
2027.
Adjusted net debt and hybrid capital
SSE's adjusted net debt and hybrid capital was £10.2bn at 31 March 2025, an
increase of £0.8bn from 31 March 2024. With no significant acquisitions or
divestments in the year, the debt movement predominantly relates to capital
investment expenditure, working capital movements and dividend payments
partially offset by operating cash flows and revaluation of foreign currency
debt.
Debt summary as at 31 March 2025
The Group and its Scottish Hydro Electric Transmission (SHET) plc entity
together issued £1.4bn of new long-term debt in the financial year whilst
also continuing to roll short-term Commercial Paper at similar levels to March
2024. Substantial issuances include:
· In June 2024 SHET plc issued a 1.5bn NOK (£111m) 10-year private
placement maturing June 2034 with a coupon of 4.731% and an all-in GBP cost of
5.3315% once swapped back to Sterling.
· In August 2024 SHET plc issued a €850m (£715m) 8-year green
bond maturing September 2032 with a coupon of 3.375% and an all-in GBP cost of
4.9127% once swapped back to Sterling.
· In March 2025 SSE plc issued a €600m (£503m) 7-year green bond
maturing March 2032 with a coupon of 3.50%. This bond has been predominantly
left in Euros as a net investment hedge against the Group's Euro denominated
assets.
· Over the course of the year, SSE plc rolled maturing short-term
Commercial Paper at similar levels to March 2024. On 31 March 2025, €1,075m
(£891m) Commercial Paper was in issue in Euros and swapped back to Sterling
at an average cost of debt of 5.0%, maturing between April and June 2025.
Medium- to long-term debt maturing in the year comprised $320m (£204m) of US
Private Placements which matured in April 2024.
Over the next 12 months there is a further £1.0bn of medium- to long-term
debt and £1.2bn of short-term debt maturing. Medium-term debt is the €600m
(£531m) Eurobond maturing 16 April 2025 and €600m (£503m) Eurobond
maturing 8 September 2025. Short-term debt is £340m of facility advances on
the SHET plc £1.5bn committed facility and €1,075m (£891m) of Commercial
Paper, however the current intention is to roll this maturing short-term debt
forward throughout the 2025/26 financial year.
Hybrid bonds summary as at 31 March 2025
Hybrid bonds are a valuable part of SSE's capital structure, helping to
diversify SSE's investor base and supporting credit ratings, as their 50%
equity treatment by the rating agencies is positive for credit metrics.
A summary of SSE's hybrid bonds as at 31 March 2025 can be found below:
Issued Hybrid Bond Value(1) All-in rate(2) First Call Date Accounting Treatment
July 2020 £600m 3.74% Apr 2026 Equity accounted
July 2020 €500m (£453m) 3.68% Jul 2027 Equity accounted
April 2022 €1bn (£831m) 4.00% Apr 2028 Equity accounted
(1) Sterling equivalents shown reflect the fixed exchange rate on date of
receipt of proceeds and is not subsequently revalued.
(2) All-in rate reflects coupon on bonds plus any cost of swap into sterling
which currently only applies to July 2020 Hybrid.
Further details on each hybrid bond can be found in note 14 to the Summary
Financial Statements and a table detailing coupon payments is shown below:
Hybrid coupon payments 2025/26 2024/25
HYe FYe HYa FYa
Total equity (cash) accounted hybrid coupon(1) £74m £74m £74m £74m
(1) Coupon payments on €1.5bn of hybrid bonds remain denominated in Euros,
and are therefore subject to foreign exchange adjustments.
Managing net finance costs
SSE's adjusted net finance costs - which exclude equity accounted hybrid
coupons - were £(281.0)m in the year ended 31 March 2025, compared to
£(225.5)m in the previous year. The higher level of finance costs in the year
is driven by a higher net debt position, a higher share of Joint Venture
interest costs, predominantly due to interest charges from Seagreen offshore
wind farm project finance. This is partially offset by higher capitalised
interest costs reflecting continued increasing construction activity.
Reported net finance costs were £(111.3)m compared to £(113.1)m in the
previous year. Higher interest charges incurred in Joint Ventures combined
with a £6.7m greater beneficial movement on financing derivatives as
previously referenced, more than offset the increase seen in adjusted net
finance costs.
Summarising cash and cash equivalents
At 31 March 2025, SSE's adjusted net debt included cash and cash equivalents
of £1.1bn, which is broadly unchanged from March 2024.
Cash collateral is only required for forward commodity contracts traded
through commodity exchanges, with the level of cash collateral either provided
or received depending on the volume of trading through the exchanges, the
periods being traded and the associated price volatility.
At 31 March 2025, £72.9m of net cash collateral was held (2024: £353.2m net
held) consisting of £82.5m received offset by £9.6m deposited on the
commodity trading exchanges. The decrease in cash collateral posted reflects a
decrease in the "in the money" trading positions held by the Group.
Short-term funding
SSE had £3.0bn (gross of the Minority Interest in SHET plc) of committed bank
facilities in place at 31 March 2025 to ensure the Group has sufficient
liquidity to allow day-to-day operations and investment programmes can
continue in the event of disruption to Capital Markets preventing SSE from
issuing new debt for a period of time. These facilities are set out in the
table below.
Date Issuer Debt type Term Value
Oct 24 SSE plc Syndicated Revolving Credit Facility with 15 Relationship Banks 2029 £1.5bn
Oct 24 SHET plc Syndicated Revolving Credit Facility with 15 Relationship Banks 2029 £1.5bn
The facilities can also be utilised to cover short-term funding requirements.
There was £340m drawings on the SHET plc facility and no drawings on the SSE
plc facility as at 31 March 2025.
Both these new facilities have two one-year extension options and are
classified as sustainability linked with interest rate and fees paid dependant
on various ESG-related metrics being achieved.
In addition to the above, a $300m private placement shelf facility exists with
NY Life which can be drawn in approximately two equal tranches 12 months apart
before February 2026. At 31 March 2025 no drawings have been made on this
facility. The Group also has access to £21m of overdraft facilities.
Maintaining a prudent treasury policy
SSE's treasury policy is designed to be prudent and flexible. Cash from
operations is first used to finance regulatory and maintenance capital
expenditure and then dividend payments, with investment and capital
expenditure for growth generally financed by a combination of cash from
operations, bank borrowings and bond issuance.
As a matter of policy, a minimum of 50% of SSE's debt is subject to fixed
rates of interest. In achieving this, SSE borrows as required on different
interest bases with financial instruments being used to achieve the desired
out-turn interest rate profile. At 31 March 2025, 91% of SSE's borrowings were
at fixed rates (31 March 2024: 93%).
Borrowings are mainly in Sterling and Euros to reflect the underlying currency
denomination of assets and cash flows within SSE. All other foreign currency
borrowings are swapped back into either Sterling or Euros.
Transactional foreign exchange risk arises in respect of procurement
contracts, fuel and carbon purchasing, commodity hedging and energy portfolio
management operations, and long-term service agreements for plant. SSE's
policy is to hedge any material transactional foreign exchange risks using
forward currency purchases and/or financial instruments. Translational foreign
exchange risk arises in respect of overseas investments; hedging in respect of
such exposures is considered on a case-by-case basis.
Operating a Scrip Dividend Scheme
SSE's Scrip Dividend Scheme was renewed for a three-year period at the 2024
AGM. As part of the Group's dividend plan to 2026/27, take-up from the Scrip
Dividend Scheme is capped at 25%. This cap is implemented by means of a share
repurchase programme, or 'buyback', following payment of the final dividend.
The scale of any share repurchase programme would be determined by shareholder
subscription to Scrip Dividend Scheme across the full year, taking into
account the interim and final dividend elections.
Overall Scrip Dividend take-up for the 2023/24 financial year was 35.7%,
therefore the Group initiated a share buy-back programme to limit any dilutive
effect back to 25%. This share buy-back programme commenced on 30 September
2024 and completed on 16 October 2024, following the repurchase of 3.8m
ordinary shares.
Principal Joint Ventures and Associates
SSE's financial results include contributions from equity interests in joint
ventures ("JVs") and associates, all of which are equity accounted. The
details of the most significant of these are included in the table below. This
table also highlights SSE's share of off-balance sheet debt associated with
its equity interests in JVs which totals around £3.7bn as at 31 March 2025.
SSE principal JVs and associates(1) Asset type SSE holding SSE share of external debt SSE Shareholder loans
Marchwood Power 920MW CCGT 50% No external debt No loans outstanding
Seabank Power 1,234MW CCGT 50% No external debt No loans outstanding
Slough Multifuel 55MW energy-from-waste facility 50% No external debt £181m
Triton Power Holdings 1,200MW CCGT & 140MW OCGT 50% No external debt No loans outstanding
Beatrice Offshore Windfarm 588MW offshore wind farm 40% £567m Project financed
Dogger Bank A Wind Farm 1,200MW offshore wind farm 40% £950m £188m
Dogger Bank B Wind Farm 1,200MW offshore wind farm 40% £941m Project financed
Dogger Bank C Wind Farm 1,200MW offshore wind farm 40% £807m Project financed
Ossian Offshore Windfarm ScotWind seabed 40% No external debt No loans outstanding
Seagreen Wind Energy 1,075MW offshore wind farm 49% £400m £961m(2)
Seagreen 1A Offshore wind farm extension 49% No external debt £29m
Lenalea Wind Farm 30MW onshore wind farm 50% No external debt £14m
Lely Alpha Offshore Wind Netherlands seabed 50% No external debt £34m
Clyde Windfarm 522MW onshore wind farm 50.1% No external debt £127m
Dunmaglass Wind Farm 94MW onshore wind farm 50.1% No external debt £47m
Stronelairg Wind Farm 228MW onshore wind farm 50.1% No external debt £89m
Cloosh Valley Wind Farm 105MW onshore wind farm 25% No external debt £25m
Neos Networks Private telecoms network 50% No external debt £84m
1 Greater Gabbard, a 504MW offshore wind farm, is proportionally consolidated
and reported as a Joint Operation with no loans outstanding.
2 For accounting purposes, £315m of the £961m of SSE shareholder loans
advanced to Seagreen Wind Energy Limited have been classified as equity.
Taxation
SSE is one of the UK's biggest taxpayers, and in the Total Tax Contribution
survey published in November 2024 was ranked 14th out of the 100 Group of
Companies in 2024 in terms of taxes borne (those which represent a cost to the
company, and which are reflected in its financial results).
SSE considers being a responsible taxpayer to be a core element of its social
contract with the societies in which it operates and seeks to pay the right
amount of tax on its profits, in the right place, at the right time. While SSE
has an obligation to its shareholders, customers and other stakeholders to
efficiently manage its total tax liability, it does not seek to use the tax
system in a way it is not meant to operate or use tax havens to reduce its tax
liabilities.
SSE was the first FTSE 100 company to be Fair Tax Mark accredited and has now
been accredited for ten years.
In November 2024, SSE published its 'Talking Tax 2024: ten years of tax
transparency' report. It did this because it believes building trust with
stakeholders on issues relating to tax is important to the long-term
sustainability of the business. SSE also won PwC's Building Public Trust Award
for Tax Reporting in the FTSE 350 for the third consecutive year in November
for the quality of its tax reporting.
In the year, SSE paid £592.1m of profit taxes, property taxes, environmental
taxes, and employment taxes in the UK, compared with £679.2m in the previous
year. The decrease in total taxes paid was primarily due to less corporation
tax being paid on UK profits. This was the result of higher capital allowances
on capital investment (see below), partly offset by higher amounts of
Electricity Generator Levy due to higher electricity generation prices.
In the year to 31 March 2025 SSE also paid €75.0m of taxes in Ireland,
compared to €68.0m the previous year, mainly due to increased profits in
SSE's Irish businesses. Ireland is the only country outside the UK in which
SSE currently has significant trading operations - activities elsewhere are
still at an early stage and are not yet paying material amounts of tax.
As with other key financial indicators, SSE's focus is on adjusted profit
before tax and, in line with that, SSE believes that the adjusted current tax
charge on that profit is the tax measure that best reflects underlying
performance. SSE's adjusted current tax rate, based on adjusted profit before
tax, was 13.9%, compared with 16.9% in 2023/24 on the same basis. The decrease
in rate is primarily due to higher UK capital allowances on the Group's
capital investment programme under full expensing, which was introduced by the
UK Government from 1 April 2023.
The UK Finance Act (No.2) 2023 introduced legislation in respect of
Multinational Top-up Tax in line with OECD BEPS pillar 2 principles, which
came into force in the current year. Similar legislation has been introduced
in the Republic of Ireland and other EU jurisdictions. The Group has
undertaken modelling and has found there to be no impact arising as tax rates
in the countries in which the Group operates exceed 15%.
Pensions
Contributing to employees' pension schemes - IAS 19 March 25 March 24
£m
£m
Net pension scheme asset recognised in the balance sheet before deferred tax 501.8 421.6
£m
Employer cash contributions Scottish Hydro Electric scheme £m 0.9 1.0
Employer cash contributions SSE Southern scheme £m 25.5 27.1
Deficit repair contribution included above £m 15.5 16.3
In the year to 31 March 2025, the surplus across SSE's two pension schemes
increased by £80.2m, from £421.6m to £501.8m, primarily due to actuarial
gains of £52.8m and contributions to the schemes.
The valuation of the SSE Southern scheme increased by £65.8m in 2024/25
primarily due to actuarial gains of £45.1m driven by gains in actuarial
assumptions and contributions to the scheme of £25.5m, offset by losses on
plan assets.
The Scottish Hydro Electric Pension scheme has partially insured against
volatility in its deferred and pensioner members through the purchase of
'buy-in' contracts meaning that the Group only retains exposure to volatility
in active employees. During the year the scheme's surplus increased by £14.4m
driven by actuarial gains relating to actuarial assumptions, offset by losses
on plan assets.
Additional information on employee pension schemes can be found in Note 23 to
the consolidated financial statements.
Sustainability and Safety Summary
Performance against 2030 Goals Mar 2025 Sep 2024 Mar 2024
Cut carbon intensity by 80%
- Scope 1 GHG intensity (gCO(2)e/kWh) 218 207 205
Increase renewable energy output fivefold
- Renewable generation output (TWh)(1) 13.3 5.4 11.2
Enable low-carbon generation and demand
- Renewables connected in SSEN Transmission network area (GW) 10.9 10.6 9.3
Champion a fair and just energy transition
- Contribution to GDP UK (£bn / €bn)(2) 7.88/0.95 - 5.86/1.04(3)
- Jobs supported in UK and Ireland(2) 62,000/5,190 - 50,380/4,450(4)
1 Includes pumped storage, battery energy storage systems, biomass and
constrained-off wind in GB
2 Direct, indirect and induced Gross Value Added and jobs supported, from PwC
analysis
3 Figures for 2023/24 have been restated to reflect post year-end adjustments
to data
4 The methodology updated to align to published government multipliers and
savings rates where available also had a small impact on the results
Safety Performance Mar 2025 Sep 2024 Mar 2024
Total Recordable Injury Rate per 100k hours worked (SSE and contractors) 0.16 0.16 0.20
From Targets to Action with accountability
Sustainability is central to SSE's operations and long-term strategy, guiding
the Group's transition to net zero while creating and sharing value with
stakeholders. Its business strategy aligns with the UN's Sustainable
Development Goals (SDGs), with four SDGs identified as highly material to the
business. By linking these SDGs to its four core business goals for 2030, SSE
aims to tackle climate change in a fair and inclusive way, ensuring working
people, consumers, and communities benefit from its approach.
Measuring performance
Carbon intensity goal: Despite the long-term trend of a 29% reduction against
the 2017/18 baseline in scope 1 GHG intensity of electricity generated,
performance from last year to this year demonstrates a 6%increase to 218g
CO2e/kWh (2023/24: 205 gCO(2)e/kWh). This was due to a rise in Thermal
generation output and constrained capacity on the grid.
Renewable Output goal: SSE Renewables has seen a significant growth in
installed capacity and output over the last few years, however the changing
macroeconomic environment and wider delays to planning processes mean the
Group has reduced its near-term capital investment expectations. As a result,
it is unlikely to meet its ambitious goal of 50TWh Renewable generation output
by 2030. Performance this year was 18% higher year-on-year, driven by an
increase in operating capacity from Viking wind farm and a full year
contribution from Seagreen offshore wind farm despite variable weather
conditions.
Enable low-carbon generation goal: As of 31 March 2025, SSE's north of
Scotland Transmission network had 10.9GW of installed renewable capacity
connected - surpassing the RIIO-T2 target of 10GW by 2026. This milestone was
achieved through the connection of several large renewable projects in
2024/25, including the successful energisation of the Shetland HVDC link.
Just transition goal: In 2024/25 SSE contributed £8.68bn to GDP and supported
67,190 jobs across the UK and Ireland, an increase from £6.75bn and 54,830
respectively in 2023/24.
Safety performance: SSE's combined SSE employee and contractor Total
Recordable Injury Rate fell to 0.16 from 0.20in the prior year, benefiting
from a ~40%improvement in contractor injury rates. SSE's immersive training
facility continues to provide positive impact with around 10,000 employees and
partners trained since April 2024, contributing to better safety behaviours.
Business Operating Review
SSEN Transmission
SSEN Transmission operates one of the fastest growing regulated electricity
networks in Europe. It owns, operates and develops the high voltage
electricity transmission system in the north of Scotland and its islands and
is owned 75% by SSE plc and 25% by Ontario Teachers' Pension Plan Board. All
references to performance indicators relate to 100% of the business unless
otherwise stated.
Key Performance Indicators March 25 March 24
Adjusted operating profit(1) - £m 322.5 419.3
Reported operating profit - £m 430.0 559.1
Adjusted investment and capital expenditure(1) - £m 953.5 595.6
Gross Regulated Asset Value (RAV) - £m(2) 7,171 5,676
SSE Share Regulated Asset Value (RAV)(1,2) - £m 5,378 4,257
Renewable Capacity connected within SSEN Transmission area - GW(3) 10.9 9.3
1 Excludes 25% minority interest
2 Estimated and subject to outturn of annual regulatory process
3 Transmission and distribution connected capacity within the SSEN
Transmission Network area, includes pumped storage and battery storage
Financial performance
Adjusted operating profit, which is presented net of the business's 25%
non-controlling interest, decreased by 23% to £322.5m from £419.3m in the
prior year. Despite growing expenditure and associated underlying allowances,
a true-up for benefit received in the 2023/24 financial year in relation to
"full expensing" accelerated capital allowances means that net allowed
revenues were lower than the prior year. In addition, operating costs and
depreciation continue to increase as the business grows rapidly to deliver the
investment programme agreed with the regulator.
Reported operating profit decreased to £430.0m compared to £559.1m, as a
result of all of the movements above but reflecting that non-controlling
interests are fully consolidated for all profit metrics under IFRS.
Operational delivery - RIIO-T2
SSEN Transmission continues to deliver a sector-leading operational
performance through the safe and reliable transmission of electricity,
recognising the increasingly important contribution its network makes to
national security of supply.
Despite the significant impact of several named storms, SSEN Transmission
achieved 95% of the annual RIIO-T2 reward through the 'Energy Not Supplied
Incentive' of £0.7m in 2018/19 prices.
Capital investment programme
SSEN Transmission's capital investment programme continues to make good
progress, increasing the network capacity that will support clean power, net
zero and energy security targets.
As of 31 March 2025, the network's total installed capacity was 12.2GW, of
which 10.9GW was renewable and other low-carbon sources - including 0.8GW of
pumped storage and battery storage.
Following the successful energisation of the Shetland HVDC link in August
2024, on budget and ahead of schedule, good progress continues to be made
connecting Shetland's electricity distribution network to the HVDC link.
Energisation will follow the completion of SSEN Distribution's 'Shetland
Standby Project' in 2026, connecting Shetland's homes and businesses to the GB
electricity network for the first time.
The East Coast 400kV upgrade continues, with good progress being made on
replacing the existing overhead line conductors between Kintore and Kincardine
and associated substation upgrades. This includes the new Kintore 400kV
substation, which upon completion is expected to be the world's first
SF(6)-free 400kV substation.
Delivering a pathway to 2030
The Pathway to 2030 programme includes 11 major projects, six onshore and five
offshore. Regulatory approvals for all these investments have been secured
through Ofgem's Large Onshore Transmission Investment (LOTI) Uncertainty
Mechanism and Accelerated Strategic Transmission Investment (ASTI) framework.
Following the granting by Scottish Ministers of the final major overhead line
consent in September 2024, the Argyll and Kintyre 275kV Reinforcement Project
is progressing with groundworks well advanced at all five substation sites.
Overhead line enabling works continue to make good progress, with overhead
line construction set to commence in summer 2025. The project is due for
energisation in 2029.
In September, construction began on the Orkney transmission link, with good
progress made with groundworks and preparatory works for the onshore cable. At
Dounreay West substation in Caithness works were temporarily suspended in
November 2024 following the identification of suspected radium during planned
radiation monitoring activities. In April 2025, agreement was reached with
SEPA to secure the necessary permit to allow works to recommence safely, with
energisation still on track for 2028.
For the Skye Reinforcement project, all substation consents are in place,
however a decision is still awaited from Scottish Ministers for overhead line
consent, which continues to take significantly longer than anticipated
following its submission back in September 2022. Substation enabling works
have already commenced, with main construction works expected to start in 2026
and energisation by the end of 2029.
The Eastern Green Link (EGL) 2 project, the first of a series of 2GW subsea
superhighways between Peterhead and England, is now in construction with
groundworks progressing well at convertor station sites at Peterhead and Drax.
This joint arrangement project with National Grid Electricity Transmission
(NGET) remains on track for energisation in 2029.
All remaining ASTI substation and convertor station planning applications
required for Pathway to 2030 delivery have now been submitted to the relevant
Local Planning Authority, with most decisions expected throughout 2025.
Coachford substation, which was part of the Beauly-Peterhead 400kV scheme, is
no longer being taken forward following engineering and construction
challenges identified through extensive site surveys and ground investigation
works at the proposed site. A new substation site in the wider area will
still be required for delivery in the early 2030s, which will now be rescoped
and redeveloped.
In April 2025, the Fort Augustus substation was approved by the Highland
Council's South Planning Committee. This is the first major ASTI planning
application to be determined and a major milestone for the Pathway to 2030
investment programme.
All remaining Section 37 consents are due to be submitted in summer 2025 and
are expected to be determined through the Scottish Government's new Priority
Applications for Transmission Infrastructure guidance which sets out a 52-week
determination ambition, including instances where a Local Public Inquiry is
triggered.
Work to progress EGL3 continues, with the outcome of the supply chain tender
expected in summer 2025. Energisation is now expected in the early 2030s due
to delays in progressing required changes of scope to NGET's onshore
infrastructure in Lincolnshire.
With the supply chain for the remainder of the ASTI projects already in place
and all associated consents submitted, all other ASTI projects remain on track
for 2030 delivery, subject to timely and positive consent decisions.
RIIO-T3 price control
In December 2024, SSEN Transmission submitted to Ofgem its Business Plan for
the RIIO-T3 regulatory price control, covering the period from April 2026 to
March 2031.
The plan sets out total expenditure of at least £22.3bn, in 2023/24 prices.
This includes around £16bn of ASTI and LOTI investments already approved by
Ofgem. The plan also sets out the potential for an additional £9.4bn of
future Uncertainty Mechanism expenditure, which includes the regional and
system operability investment required to deliver Clean Power 2030.
The successful delivery of this plan requires a financial framework that
recognises the unprecedented levels of investment needed. Draft Determinations
are expected on the 25(th) June 2025 ahead of Final Determinations in December
2025.
Growth opportunities
In December 2024 Ofgem reaffirmed the need for several additional strategic
investments in the north of Scotland that were set out in the National Energy
System Operator's (NESO's) 'Beyond 2030' report, providing initial funding to
take these projects the consenting stage through the regulator's 'Delivery
Track' funding route and access to Ofgem's new Advanced Procurement Mechanism.
These projects include a second HVDC link to Shetland and combined represent
an investment of over £5bn for delivery between 2030 and 2035. Ofgem has also
exempted these projects from competition.
Further investments will also be required to deliver the local and regional
investments that are critical to support the UK Government's Clean Power 2030
target. This includes potential customer connections and system operability
investments, all of which were submitted to Ofgem in February 2025 as an
addendum to the RIIO-T3 Business Plan.
A further high capacity HVDC subsea link from the north-east of Scotland to
England, EGL5, which follows a change in scope by the NESO from its previously
proposed coordinated offshore grid, presents additional future growth
opportunities.
These additional growth opportunities were included within the potential
£9.4bn RIIO-T3 Uncertainty Mechanism expenditure noted above.
SSEN Distribution
SSEN Distribution, operating under licence as Southern Electric Power
Distribution plc (SEPD) and Scottish Hydro Electric Power Distribution plc
(SHEPD), serves more than 3.9m homes and businesses across central southern
England and the north of Scotland. The business serves some of the most
diverse and unique geographies across the UK, spanning more than 75,000km²,
and keeps customers and communities connected while developing the flexible
electricity network vital to achieving net zero.
Key Performance Indicators March 25 March 24
Adjusted and reported operating profit - £m 736.0 272.1
Adjusted investment and capital expenditure - £m 635.8 505.1
Regulated Asset Value (RAV) - £m 5,737 5,301
Electricity Distributed - TWh 38 37
Customer minutes lost (SHEPD) average per customer 69 66
Customer minutes lost (SEPD) average per customer 51 58
Customer interruptions (SHEPD) per 100 customers 59 57
Customer interruptions (SEPD) per 100 customers 42 51
RAV, Customer minutes lost and Customer interruptions figures estimated and
subject to outturn of annual regulatory process
Financial performance
Adjusted and reported operating profit increased by 170% to £736.0m compared
to £272.1m in the prior year. The large increase in price control allowed
revenues in the year reflects that 2024/25 was the earliest financial year
when unexpectedly-high cost inflation in 2022/23 and 2023/24 could be
recovered, as tariffs are set 15 months before the start of financial year.
This one-off cost inflation catch-up is partially offset by increasing
operating costs associated with business transformation and improving network
resilience, as well as higher depreciation on a growing asset base.
Operational delivery - RIIO-ED2
SSEN Distribution has completed the second year of the five-year RIIO-ED2
price control which runs until March 2028 and includes £3.6bn of baseline
expenditure (2020/21 prices). It also provides the opportunity to trigger
additional funding under Uncertainty Mechanisms (UMs) which could add at least
£0.7bn to expenditure in the period.
During the financial year, an additional £106m has been secured through UMs
related to investment in subsea and on island infrastructure, storm resilience
and cyber security. An additional £236m of UMs are currently being assessed
by Ofgem, with further submissions planned in the remaining years of the price
control.
Customer performance
In RIIO-ED2, the ability to secure higher incentive performance has been
tightened compared to previous price control periods. Within the Interruptions
Incentive Scheme (IIS), SSEN is offered an incentive on its performance
against the loss of electricity supply through the recording of the number of
Customer Interruptions (CI) and Customer Minutes Lost (CML). These include
planned, as well as unplanned, interruptions.
Following a challenging start in the first year of the price control, IIS
performance across both measures improved in the SEPD region in 2024/25, with
a decrease in CI of 18% and CML by 12% due to targeted improvement work.
However, an unsettled winter in the SHEPD region adversely impacted CI and CML
performance, with small increases of 4% and 5% respectively. An overall
penalty of £9m was incurred across SEPD and SHEPD under the scheme, reduced
from £14m in 2023/24.
Cumulative investment of over £40m in automation across both licence areas
continues to have a positive impact on SSEN Distribution's ability to
reconfigure the system quickly and remotely, following unplanned faults. This,
alongside projects to reinforce the network, aims to improve IIS performance
in future years.
SSEN Distribution's performance in exceptional storm events remains a
strength. In January 2025, Storm Éowyn, which the Met Office called the
'strongest storm in a decade', caused 580 faults on SHEPD's network. Power was
restored to 95% of the 92,000 customers affected within 48 hours and customer
service during the storm was maintained at close to BAU levels.
Customer Satisfaction performance remains a clear focus for the business. The
Broad Measure incentive score remained broadly level in 2024/25 across SEPD
and SHEPD but new technology and process improvements, including self-serve
functionality and improved channel options, are expected to benefit future
performance.
SSEN's Distribution System Operations (DSO) activities are estimated to have
received an around £4m reward in 2024/25 through the DSO Annual Incentive
process. Achieving upper-tier performance against other DNOs, SSEN's
"exceptionally well-put together" submission was praised by Ofgem's
independent panel.
Capital investment
The second year of RIIO-ED2 has seen an acceleration of the major capital
investment programme across both networks. This is delivering performance
improvements, an improved service for customers, and future earnings through
RAV growth.
In the SEPD region £1bn of investment is to be delivered under efficient
Capital Delivery Agreements with three contract partners. A £200m, multi-year
programme of investment to transform Oxfordshire's local electricity system is
getting under way and work began on a £12m project to improve Bournemouth's
local network, following two £8m network reinforcement projects in Portsmouth
and Southampton which will be completed later this year.
In SHEPD, similar holistic contracts worth £450m have been signed with five
contract partners to deliver network improvements across the north of Scotland
licence area by the turn of the decade. During 2024/25, the laying of a new
2km subsea cable linking Islay with Jura was completed, ensuring a safe,
reliable supply for these communities.
Proposals for the 'Shetland Standby Project' were approved in December 2024,
with £93m of funding awarded over 10 years. A battery storage system will be
built to provide interim supply in the event of a network fault while Lerwick
power station is brought out of standby mode. Work will accelerate later this
year, with energisation due in 2026.
Growth opportunities
The National Infrastructure Commission's recent call for greater proactive
investment in Electricity Distribution networks aligns with SSEN
Distribution's progressive approach to strategic development planning. The NIC
estimates between £37-50bn of investment in the GB distribution network is
needed by 2050 which represents a doubling of current annual allowances for
load-related expenditure, on top of 'business as usual' investment. This
aligns with SSEN Distribution's work to develop Strategic Development Plans at
each Grid Supply Point (GSP).
SSEN's award-winning Local Energy Net Zero Accelerator (LENZA) tool has now
been adopted by all local authorities based wholly within its network areas.
455 local planners - a three-fold increase in a year - are now using LENZA to
devise the most-efficient locations for decarbonised developments in their
communities.
This move to a strategically-planned and long-term investment approach is also
informing SSEN Distribution's submission to the RIIO-ED2 load-related
Uncertainty Mechanism later this year and emerging thinking ahead of the ED3
price control which begins in 2028. Further detail is included in SSEN's
Empowering Communities, Enabling Growth publication, issued in early May 2025.
In late April, Ofgem published its Framework Decision for ED3 which signalled
a clear shift to a more planned and proactive approach to investment. It is
expected to build on this approach in its Sector Specific Methodology
Consultation, launching in the summer of this year.
SSE Renewables
SSE Renewables is a leading developer and operator of renewable energy
generation, focusing on onshore and offshore wind, hydro, solar and battery
storage across the UK and Ireland, and in carefully selected international
markets.
Key Performance Indicators March 25 March 24
Adjusted operating profit - £m 1,038.8 833.1
Reported operating profit - £m 617.6 630.3
Adjusted investment & capital expenditure - £m 1,001.8 1,097.1
Generation capacity - MW
Onshore wind capacity (GB) - MW 1,728 1,285
Onshore wind capacity (NI) - MW 117 117
Onshore wind capacity (ROI) - MW 581 582
Onshore wind capacity (Europe) - MW 28 -
Total onshore wind capacity - MW 2,454 1,984
Offshore wind capacity (GB) - MW 1,014 1,014
Conventional hydro capacity (GB) - MW 1,164 1,159
Pumped storage capacity (GB) - MW 300 300
Battery capacity (GB) - MW 50 -
Total renewable generation capacity (inc. pumped storage) - MW 4,982 4,457
Contracted capacity 3,189 2,792
Generation output - GWh (including compensated constraints)
Onshore wind output (GB) - GWh 4,447 2,991
Onshore wind output (NI) - GWh 224 251
Onshore wind output (ROI) - GWh 1,324 1,352
Onshore wind output (Europe) - GWh 17 -
Total onshore wind output - GWh 6,012 4,594
Offshore wind output (GB) - GWh 3,878 3,178
Conventional hydro output (GB) - GWh 2,946 3,071
Pumped storage output (GB) - GWh 324 315
Battery output (GB)-GWh 46 -
Total renewable generation (inc. pumped storage & battery) - GWh 13,206 11,158
1. Capacity and output based on 100% of wholly owned sites and share of joint
ventures
2. Total renewable generation capacity is increased by 525MW. This
principally reflects 443MW from Viking wind farm, 50MW from Salisbury BESS and
28MW from Chaintrix wind farm.
3. Contracted capacity includes sites with a CfD, RESS contract, eligible for
ROCs, or contracted under REFIT (CfD contracts may be still to commence)
4. Onshore GB wind output includes 1,290GWh of compensated constrained-off
generation in FY2024/25 and 530GWh in FY2023/24; Offshore GB wind output
includes 1,748GWh of compensated constrained-off generation in FY2024/25 and
701GWh in FY2023/24.
5. Biomass capacity of 15MW and output of 69GWh in FY2024/25 and 77GWh
FY2023/24 is excluded, with the associated operating profit or loss reported
within SSE Thermal.
Financial performance
Adjusted operating profit increased by 25% to £1,038.8m from £833.1m in the
prior year. The increase reflected 18% higher output driven principally by
increased operating capacity with Viking onshore wind farm (443MW) reaching
completion in August 2024 and a full year contribution from Seagreen offshore
wind farm (1,075MW, SSE share 49%). The increase in output was delivered in a
higher hedged price environment, with 2024/25 hedge prices around 30% higher
than the prior year, delivering value for SSE Renewables despite a still
volatile price environment.
Reported operating profit decreased to £617.6m from £630.3m in the prior
year. This reflects the above and other movements including a non-cash
impairment of £249.5m relating to the Southern Europe Renewables pipeline,
reflecting delays in permitting and grid connections resulting in a slower
than originally anticipated build of these projects, and an increase in the
Joint Venture / associate share of interest and tax.
Operational delivery
Year-on-year onshore wind volume increased by 31% from 4.6TWh to 6.0TWh,
primarily due to the addition of Viking. Weather conditions were variable
throughout the year, and operational availability was negatively impacted by
the effects of Storm Éowyn in January 2025.
In offshore wind, output increased by 22% from 3.2TWh to 3.9TWh. The increase
is primarily driven by the first full year of operations of Seagreen which saw
a year-on-year increase in production, partially offset by variable weather
conditions over the winter months.
In hydro, plant availability was strong but production decreased by 4% from
3.1TWh to 2.9TWh due to the impact from highly variable weather, ranging from
extended lower-than-average rainfall periods to extreme storm events. Tummel
Bridge returned to service in September 2024 following refurbishment,
increasing output by 6MW to 40MW during optimum conditions.
Agreements for de-rated capacity were secured in the T-4 GB capacity auction
for 1,238MW of hydro, pumped storage, onshore wind and solar generation at a
clearing price of £60/kW. In the T-1 capacity auction, SSE Renewables secured
a one-year contract for 30MW (SSE share) of offshore generation at Seagreen
for delivery year 2025/26. In Ireland, contracts were secured for 11MW of
onshore wind and 14MW of battery storage (10-year agreement) in Ireland for
delivery year 2028/29.
Delivering world-class assets
Onshore, in addition to the delivery on time and on budget of Viking in
Shetland, SSE Renewables is approaching completion and full commercial
operations at Yellow River Wind Farm (101MW) in Ireland which is contracted
under a 16.5-year RESS 3 contract with the Irish Government.
Following a final investment decision in December 2024, construction commenced
in May 2025 on Strathy South wind farm (208MW) in the Scottish Highlands. The
project - fully contracted through a 15-year Allocation Round 5 (AR5) CfD
contract with the UK Government - is targeting commercial operations in late
2027. At Aberarder wind farm (50MW) in Scotland, also fully contracted under
an AR5 CfD contract, turbine deliveries will commence in summer 2025 ahead of
commercial operations by the end of 2026.
In England, SSE Renewables is finalising construction of its 150MW Ferrybridge
battery energy storage system (BESS) project, with commercial operations
expected in summer 2025. Battery installation is ongoing at Monk Fryston BESS
(320MW) and Fiddlers Ferry (150MW) ahead of expected operations in early and
late 2026, respectively.
At Seagreen, an agreement was signed in March 2025 to sell the Offshore
Transmission Assets as required by the offshore transmission regime.
At Dogger Bank A (1,200MW, SSE share 40%), offshore turbine installation and
commissioning continues. In April 2025, turbine installation passed the
halfway mark, and the project remains on track to reach completion within the
second half of 2025.
On Dogger Bank B (1,200MW, SSE share 40%), all 95 monopile foundations have
been installed while interarray cable-laying work is expected to complete in
summer 2025. On Dogger Bank C (1,200MW, SSE share 40%), installation of
monopile foundations has commenced and the last of the foundations has been
delivered to storage. A second jack-up vessel, the Seaway Ventus, will join
the turbine installation campaign in the second quarter of 2026 to support
delivery of Dogger Bank B and C.
In hydro, improvement works are continuing on assets to maximise run-off,
storage and optimisation benefits. In February 2025, a £70m investment to
repower the 45MW Lochay power station and extend its operational life by at
least another 40 years was announced. In March 2025, Inverawe power station
(22.75MW) secured a 15-year refurbishment contract in the GB T-4 capacity
auction.
In north-east France, Chaintrix (28MW) entered commercial operations in
February 2025. Construction is ongoing at Jubera (64MW) in northern Spain,
targeting commissioning at the end of 2025. In southern Italy, construction
has commenced at the combined Castel Favorito and Masseria la Cattiva
(together 17MW) with commercial operations expected in 2026.
Growth opportunities
In onshore development, SSE continues to progress Drumnahough wind farm (60MW,
SSE share 50%) in Ireland and Cloiche wind farm (130.5MW) in Scotland, both
fully contracted in 2024 under Ireland's RESS-4 and the UK's AR6 auction
rounds, towards final investment decisions expected in the second half of
2025.
In offshore development, outline planning permission was granted in November
2024 for Berwick Bank wind farm's (4.1GW) remaining onshore transmission
infrastructure and grid connection in Northumberland. SSE Renewables expects
to receive a determination by Scottish Government ministers on its Section 36
consent application for the offshore aspects of the project by summer 2025.
The UK Government's CfD Allocation Round 7 (AR7) is expected to open towards
the end of summer 2025. Depending on the final auction eligibility criteria,
SSE could have onshore and offshore wind projects eligible to participate.
In March 2025, Ofgem and DESNZ jointly published a high-level design of the
long-duration electricity storage cap and floor scheme. The first application
window is open with the first projects to be awarded a cap and floor contract
by Q2 2026. SSE intends to submit its Coire Glas pumped hydro storage project
(c.1,300MW) into the first window subject to the level of risk and uncertainty
associated with large-scale pumped storage hydro investment being
appropriately recognised in the scheme.
SSE Thermal
SSE Thermal owns and operates conventional flexible thermal generation in GB
and Ireland, whilst actively exploring opportunities for growth in
lower-carbon generation technologies. SSE Thermal's flexible and efficient
fleet of gas-fired generation will continue to play a critical role in the
transition to net zero, providing reliable back-up power that complements
intermittent renewable energy.
Key Performance Indicators March 25 March 24
Adjusted operating profit - £m 248.5 752.5
Reported operating profit - £m 240.8 660.8
Adjusted investment and capital expenditure - £m 183.1 109.2
Generation capacity - MW
Gas- and oil-fired generation capacity (GB) - MW 5,538 5,538
Gas- and oil-fired generation capacity (ROI) - MW 672 672
Energy from waste capacity & Biomass (GB) - MW 43 15
Total thermal generation capacity - MW 6,252 6,225
Generation output - GWh
Gas- and oil-fired output (GB) - GWh 16,237 13,597
Gas- and oil-fired output (ROI) - GWh 1,405 1,650
Energy from waste & Biomass output (GB) - GWh 182 78
Total thermal generation - GWh 17,824 15,325
1 Capacity is wholly owned and share of joint ventures, and reflects
Transmission Entry Capacity.
2 Output is based on SSE 100% share of wholly owned sites and 100% share of
Marchwood PPAs due to the contractual arrangement.
3 During the year ended 31 March 2025, SSE Thermal took responsibility for the
Slough Heat and Power business from SSE Enterprise. Comparative performance
has been restated.
Financial performance
Adjusted operating profit decreased by 67% to £248.5m, compared to £752.5m
in the prior year. This decrease was in line with expectations set out at the
start of the financial year and principally driven by lower spark spread
prices and significantly lower market volatility due to continued
normalisation of energy prices. The result also reflects a fall of £38m in
Capacity Market payments compared to the previous year, reflecting the lower
T-1 auction outturn, as well as a £38.8m one-off benefit from the sale of
land at Ferrybridge.
Reported operating profit decreased to £240.8m, compared to £660.8m in the
prior year. In addition to the movements above, the prior year result was
impacted by a £(63.2)m non-recurring impairment charge on Triton Power and
losses on re-measurements of operating derivatives in that business.
Operational delivery
Thermal plants continue to provide back-up reserve to the renewables-led
system as well as flexible response as overall UK balances change.
Increasingly this means that the value of the intrinsic baseload spark spread
is less relevant to SSE Thermal revenues, and value is accrued through the
Capacity Market, providing dispatchable capacity during periods of tight
system margin, offering the National Energy System Operator (NESO) services
though the Balancing Mechanism and other ancillary contracts, and through
trading the option value of assets.
Managing availability responsibly, both within year and taking a view of
future system needs, continues to be a priority for SSE Thermal. As such, the
fleet delivered strong commercial availability overall although extended
outages at Great Island limited its operation in the market at times.
Likewise, planned and unplanned outages at Keadby 2 also reduced opportunities
to secure value during the year.
The UK Government's recently announced Clean Power 2030 Plan indicates a need
for around 35GW of unabated thermal plant to be on the system into the 2030s.
With older existing assets (Keadby 1, Medway and Peterhead) now expected to
play an important role on the system for longer than originally anticipated,
and at least to 2035, SSE Thermal is now proactively planning investment
across a number of years to build in additional longevity and resilience
across the fleet.
Construction programme
Construction and commissioning of Slough Multifuel (55MW) was completed in
August 2024. The 50/50 joint venture energy-from-waste plant was delivered
ahead of schedule and on budget, with its 15-year Capacity Market agreement
commencing in October 2024.
In Ireland, construction of a 150MW Temporary Emergency Generation unit at
Tarbert has completed, with some final scopes being completed this year.
Delivered at the request of Irish authorities, the unit is now available to
the system and will only be utilised when market-sourced generation is
insufficient to meet system needs.
On the same site, construction will begin this year on the 300MW Tarbert Next
Generation power station ahead of a planned completion by the end of 2027. The
construction cost is expected to total up to €300m, and the station benefits
from a 10-year capacity agreement which has secured a total of €335m of
revenues.
Growth opportunities
SSE Thermal is committed to bringing forward new flexible generation which can
support short-term security of supply requirements while also delivering
long-term decarbonisation. As a pragmatic partner to government, the business
is developing options in both GB and Ireland which can deliver much-needed
capacity ahead of anticipated increases in electricity demand, recognising
that some new unabated flexible power may be needed to fill a gap if
low-carbon options cannot be delivered in time.
In December 2024, SSE Thermal launched Mission H2 Power with Siemens Energy,
which aims to deliver gas turbine technology capable of running on 100%
hydrogen. This will directly support the decarbonisation of Keadby 2 as well
as the wider development of a low-carbon power portfolio, with the UK
Government confirming its intention to develop a Dispatchable Power Agreement
to support deployment of hydrogen-to-power.
SSE Thermal continues to progress plans for new 'decarb-ready' power stations
which would initially run on natural gas before converting to hydrogen. Public
consultations have been completed for the 900MW Keadby Next Generation power
station in North Lincolnshire, with planning expected to be submitted later
this year.
The UK Government Comprehensive Spending Review, expected summer 2025, should
provide an update on further deployment of carbon capture technology and
implications for SSE Thermal's proposed up to 900MW Peterhead and Keadby
Carbon Capture power stations.
In April 2025, Aldbrough Hydrogen Pathfinder was shortlisted in the UK
Government's Hydrogen Allocation Round 2 process and received planning
permission. Subject to reaching a final investment decision, the project could
be operational by 2029.
In Ireland, planning permission has been granted for Platin power station in
County Meath with a final investment decision targeted later this year, and
for a synchronous compensator at Great Island, which could bring an additional
source of revenue if a contract for Low Carbon Inertia Services is secured.
Gas Storage
SSE holds around 40% of the UK's conventional underground gas storage capacity
at two sites on the east Yorkshire coast. The Atwick facility, near Hornsea,
is wholly owned by SSE, while the Aldbrough facility is operated as a joint
venture with Equinor. These two sites support the security of gas supply for
the UK whilst providing important liquidity to the UK and interconnected gas
markets.
Key Performance Indicators March 25 March 24
Adjusted operating (loss) / profit - £m (37.1) 82.8
Reported operating (loss) - £m (45.5) (42.2)
Adjusted investment and capital expenditure - £m 0.7 0.8
Gas storage level at year end - mTh 79 40
Gas storage level at year end - % 47 21
Financial performance
Adjusted operating profit decreased to a £(37.1)m loss, compared to a profit
of £82.8m in the prior year. A typical year sees gas injected in the summer
months when prices are low and then withdrawn and sold in winter months when
prices are higher. The past year has seen unusual market conditions for these
assets with the impact of mandatory gas storage filling targets in the
European Union, and proposed gas storage support in Germany driving summer
prices higher than those in the winter, distorting the natural functioning of
the market and limiting the assets' ability to trade and secure value.
However, the markets are now providing pockets of valuable spread and summer
re-injection has commenced.
Reported operating loss increased to a £(45.5m), compared to a loss of
£(42.2)m in the prior year. In addition to the movements above, this mainly
reflects a £(134.1)m impairment charge in the prior year which was not
repeated this year.
Operational delivery
SSE's Gas Storage business continues to be an important risk management tool
for the Group's generation portfolio. It offers flexibility as a result of the
assets' technical ability to cycle quickly and mitigate exposures from wind
speeds and demand variability, which drives short-term gas demand from thermal
generation.
Third party contracts were secured with three customers for injection and
withdrawal, locking in value for the assets while maintaining the ability to
trade the remaining capacity. However, the gas markets demonstrated limited
volatility over the course of the financial year, with minimal spreads between
Summer 2024 and Winter 2024 prices reducing the ability to secure value.
Injection availability at Atwick was limited from August, due to planned
maintenance on Cavern Three and the compressors. At Aldbrough, all caverns
provided strong injection and withdrawal availability across the full year.
Political intervention in the wider European gas storage market was one of the
major factors which limited and even inverted the normal summer / winter
spreads.
Work is under way to prepare Cavern Eight at Atwick for potential rewatering
in the next financial year. If a decision to rewater is taken, it would create
an opportunity to secure value from the maintained cushion gas, whilst leaving
open the future possibility to return to service as natural gas or hydrogen
storage, should market conditions support this.
Growth opportunities
Ahead of the National Energy System Operator taking on this responsibility in
2026, the UK Government is progressing work on strategic planning of hydrogen
storage and transport infrastructure. In November 2024, the Government began
early engagement, as a first step in a formal procurement process for hydrogen
storage. This was followed by confirmation in December 2024 that the
Government aims to publish details for the first allocation during 2025, with
an ambition for up to two storage projects to be in operation or construction
by 2030. To support this ambition, a planning application for Aldbrough
Hydrogen Storage is being targeted for late 2025.
Energy Customer Solutions
Energy Customer Solutions (ECS) is SSE's shop window to the non-domestic
market in GB and the whole energy supply market on the island of Ireland, with
dedicated energy experts as key account managers pulling together the best of
SSE into powerful combined propositions.
During the year, ECS has continued to focus on serving customers; extending
our service range and expanding our product portfolio. Tight commercial and
risk controls have enabled the business to navigate volatility while providing
a range of tariffs and low carbon solutions to all customer segments.
In January the former SSE Enterprise division merged with ECS to achieve a
greater range of integrated energy solutions, including distributed energy
offerings for cities and large energy customers. During the year the breadth
of ECS's Corporate Power Purchase Agreement products was extended, securing
major customers in the retail and banking sectors.
SSE Airtricity
Key Performance Indicators March 25 March 24
Adjusted operating profit - £m 159.4 95.0
Reported operating profit - £m 157.0 94.5
Adjusted investment and capital expenditure - £m 6.9 14.8
Aged Debt (60 days past due) - £m 19.2 18.2
Bad debt expense - £m 2.8 13.7
Airtricity Electricity Sold - GWh 6,704 6,400
Airtricity Gas Sold - mtherms 237 199
All Ireland energy market customers - m 0.77 0.75
Financial performance
Adjusted profitability increased 68% to £159.4m, from £95.0m in the prior
year. The prior year saw lower margins as the business supported customers
through the cost-of-living crisis and by largely absorbing the impact of
higher commodity costs and indirect costs including bad debt expenses. The
normalisation of energy prices in the last financial year meant the business
was able to deliver tariff reductions within year whilst also returning supply
margins to more sustainable levels. In addition, income from legacy wind farms
contracted to SSE Airtricity remained robust, increasing by around £10m
compared to prior year.
Reported operating profit also increased to £157.0m compared to £94.5m in
the prior year, mainly reflecting a £(2.0)m restructuring charge relating to
the Group operating model and efficiency review in addition to the movements
above.
Operational delivery
SSE Airtricity has achieved an increase in customer accounts to 770,000 thanks
to a market-leading fixed-price offer and strong customer service. We aim to
support customers to understand and reduce their energy bills and the business
is pleased that around 20% of customer acquisitions are on a smart product.
Airtricity has a long history of financial support for customers and in
October 2024 it decided against passing through significant increases in
transmission and distribution charges during winter, a decision which
suppressed margins in the second half of the year. Following other market
movements, it announced in February 2025 that it would increase tariffs by an
average of 9.5% with effect from 2 April to collect these regulated charges
from customers.
Beyond energy supply, Airtricity actively develops propositions that will help
lower bills and move customers towards a low carbon pathway. During the
financial year, a partnership with Activ8 Energies installed solar on over
2,000 rooftops, lowering bills by up to 50%. Energy Services products were
delivered to around 5,000 customers throughout the year, ranging from Smart
home surveys and heating upgrades to full-scale domestic retrofits.
Airtricity also supported customers to access up to £20m in grant funding.
New partnerships have also been formed with Ohme and Nevo to help deliver
integrated product offerings including Electric Vehicles (EVs), home charging
and a smart EV tariff.
SSE Business Energy
Key Performance Indicators March 25 March 24(1)
Adjusted operating profit - £m 32.7 55.2
Reported operating profit - £m 32.2 55.2
Adjusted investment and capital expenditure - £m 73.1 84.6
Electricity Sold - GWh 9,840 10,693
Gas Sold - mtherms 120 168
Aged Debt (60 days past due) - £m 279 336
Bad debt expense - £m 40 113
Energy customers' accounts - m 0.31 0.38
1 During the year ended 31 March 2025, SSE Business Energy has taken
responsibility for private electric networks and businesses aligned with the
provision of low carbon energy solutions to customers from SSE Enterprise.
Comparative performance has been restated.
Financial performance
Adjusted profitability decreased by 41% to £32.7m compared to £55.2m in the
prior year. The focus for the business during the past year was the
stabilisation of a new customer management and billing system known as Evolve.
During the stabilisation period, servicing of existing customers was
prioritised whilst acquisition and onboarding activity was limited,
contributing to an overall reduction in customer numbers and volumes sold.
This was partially offset by a lower bad debt expense as improved customer
data from the Evolve system, lower customer tariffs and a more stable market
price environment reduced the overall level of provisioning required.
Reported operating profit also decreased to £32.2m compared to £55.2m in the
prior year, reflecting the movements above in addition to a £(0.5)m share of
interest and tax from Joint Ventures.
Operational delivery
Over the last 12 months, Business Energy (BE) has delivered solid performance
with a focus on billing platform stabilisation and the extension of low-carbon
and distributed energy solutions. Evolve has been implemented, modernising the
IT estate and providing the basis for improved customer experience, product
delivery and commercial controls.
The business understands the needs of commercial customers of all sizes and
has selected a small number of partners to bring a range of propositions to
market. A partnership with Ortus Energy, offering rooftop solar installations
to commercial customers, includes the acquisition of 13MW of existing rooftop
solar assets and the option to finance up to 130MW of future projects over the
next three years.
In July 2024 a Joint Venture was agreed with TotalEnergies - Source - to
deploy and operate up to 3,000 high power charge points, grouped in 300 EV
hubs. The joint venture has made a strong start with 222 charge points at 24
EV charging hubs completed.
Growth opportunities
As the shop window for SSE, backed by the Group's generation assets, ECS will
continue to deliver access to increasing volumes of green energy from SSE's
wind farms for all customer segments. With the proven ability to innovate and
create partnerships, ECS will continue to provide a growing suite of energy
products and distributed energy solutions to support customers on the journey
to net zero, including Corporate Power Purchase Agreements.
The business aims to remove complexity for customers as they reduce their
carbon emissions. In Ireland, ECS currently provides around 85% of the energy
by volume used by data centres and will continue to target the tech and pharma
sectors where the strongest growth is expected.
In GB, the UK Government's focus on growth and devolution to regions is an
opportunity to leverage strong relationships the business has with combined
authorities and other public bodies.
SSE Energy Markets
SSE Energy Markets commercially optimises all of SSE's market-based Business
Unit assets in the wholesale energy markets, securing value on behalf of these
businesses by trading in wholesale energy markets and managing volatility
through active risk management.
This involves trading the principal commodities to which SSE's asset
portfolios are exposed, as well as the spreads between two or more commodity
prices (e.g. spark spreads): power (baseload and other products); gas; and
carbon (emissions allowances). Each commodity has different risk and liquidity
characteristics, which impacts the quantum of hedging possible.
This is supplemented by optimisation activities and position taking - both
subject to strict position limits and value at risk controls - and contracting
for third party Power Purchase Agreement (PPA) and route-to-market contracts.
Key Performance Indicators March 25 March 24
Adjusted operating profit - £m 30.0 37.5
Reported operating profit / (loss) - £m (42.9) 588.6
1 During the year ended 31 March 2025, SSE Energy Markets has taken
responsibility for energy optimisation services from SSE Enterprise.
Comparative performance has been restated.
Financial performance
Adjusted operating profit has decreased 20% to £30.0m from a £37.5m profit
in the prior year. Energy Markets continues to drive significant value for the
energy-exposed businesses through its trading services and the business itself
generates a relatively low level of baseline operating earnings from these
services. The decrease in year-on-year profitability is mainly due to reduced
margin on optimisation activities given the continued normalisation of
volatility and price of power and gas trades in the market.
Reported operating profitability decreased to a loss of £(42.9)m from a
profit of £588.6m in the prior year. In addition to the movements above, the
reported operating result includes net re-measurement losses on forward
commodity derivatives relative to a large gain in the prior year. These IFRS 9
re-measurements exclude any re-measurement of 'own use' contracts and are
unrelated to underlying operating performance.
Operational delivery
SSE Energy Markets has continued to play a pivotal role in navigating energy
market volatility, managing risk and ensuring the Group's market-based
Business Units can capture and maximise value. This covers all trading
periods, with decisions being made from one centre of excellence. The value
Energy Markets secures for SSE's asset portfolio continues to be reported
against individual Business Units.
The business has an increasing focus on building a portfolio of third party
assets, bringing added independent value to the Group. In the financial year,
SSE Energy Markets signed a 10-year agreement to optimise two major battery
energy storage systems being developed by Copenhagen Infrastructure Partners
(CIP) in Scotland with a combined capacity of 1GW.
It also signed a number of route-to-market PPA contracts ranging from two to
15-year terms. In total, SSE Energy Markets now holds route-to-market
contracts with 2.75GW of assets which are backed by a Contract for Difference,
of which around 2.3GW are classed as third party.
SSE Energy Markets has also increased the volumes it is trading in European
power and gas markets, subject to strict position limits and Value at Risk
(VAR) controls, which will be critical as the Group seeks opportunities in
carefully selected international markets. It has also continued to adapt to
the shifting energy landscape by further strengthening its data and advanced
analytics capabilities.
Alternative Performance Measures
When assessing, discussing and measuring the Group's financial performance,
management refer to measures used for internal performance management. These
measures are not defined or specified under International Financial Reporting
Standards ("IFRS") and as such are considered to be Alternative Performance
Measures ("APMs").
By their nature, APMs are not uniformly applied by all preparers including
other participants in the Group's industry. Accordingly, APMs used by the
Group may not be comparable to other companies within the Group's industry.
Purpose
APMs are used by management to aid comparison and assess historical
performance against internal performance benchmarks and across reporting
periods. These measures provide an ongoing and consistent basis to assess
performance by excluding items that are materially non-recurring,
uncontrollable or exceptional. These measures can be classified in terms of
their key financial characteristics:
· Profit measures allow management to assess and benchmark
underlying business performance during the year. They are primarily used by
operational management to measure operating profit contribution and are also
used by the Board to assess performance against business plan. The Group has
six profit measures, of which adjusted operating profit and adjusted profit
before tax are the main focus of management through the financial year and
adjusted earnings per share is the main focus of management on an annual
basis. In order to derive adjusted earnings per share, the Group has defined
adjusted operating profit, adjusted net finance costs, and adjusted current
tax charge as components of the adjusted earnings per share calculation.
Adjusted EBITDA is used by management as a proxy for cash derived from
ordinary operations of the Group.
· Capital measures allow management to track and assess the
progress of the Group's significant ongoing investment in capital assets and
projects against their investment cases, including the expected timing of
their operational deployment and also to provide a measure of progress against
the Group's strategic Net Zero Acceleration Programme Plus objectives ("NZAP
Plus").
· Debt measures allow management to record and monitor both
operating cash generation and the Group's ongoing financing and liquidity
position.
During the year the Group simplified its adjusted profit metrics by removing
the adjustment for interest on net pension assets/liabilities valued under IAS
19 "Employee Benefits" as explained in note 2.3.2 to the Summary Financial
Statements. There have been no other changes to the Group's APMs in the
current year.
The following section explains the key APMs applied by the Group and referred
to in these Summary Financial Statements:
Profit measures
Group APM Purpose Closest equivalent IFRS measure Adjustments to reconcile to primary financial statements
Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) Profit measure Operating profit · Movement on operating and joint venture operating derivatives
("certain re-measurements")
· Exceptional items
· Adjustments to Gas Production decommissioning provision
· Share of joint ventures and associates' interest and tax
· Depreciation and amortisation before exceptional charges
(including depreciation expense on fair value uplifts)
· Share of joint ventures and associates' depreciation and
amortisation
· Non-controlling share of operating profit
· Non-controlling share of depreciation and amortisation
· Release of deferred income
Adjusted Operating Profit Profit measure Operating profit · Movement on operating and joint venture operating derivatives
("certain re-measurements")
· Exceptional items
· Adjustments to Gas Production decommissioning provision
· Depreciation expense on fair value uplifts
· Share of joint ventures and associates' interest and tax
· Non-controlling share of operating profit
Adjusted Profit Before Tax Profit measure Profit before tax · Movement on operating and financing derivatives ("certain
re-measurements")
· Exceptional items
· Adjustments to Gas Production decommissioning provision
· Non-controlling share of profit before tax
· Depreciation expense on fair value uplifts
· Share of joint ventures and associates' tax
Adjusted Net Finance Costs Profit measure Net finance costs · Exceptional items
· Movement on financing derivatives
· Share of joint ventures and associates' interest
· Non-controlling share of financing costs
Adjusted Current Tax Charge Profit measure Tax charge · Share of joint ventures and associates' tax
· Non-controlling share of current tax
· Deferred tax including share of joint ventures, associates and
non-controlling interests
· Tax on exceptional items and certain re-measurements
Adjusted Earnings Per Share Profit measure Earnings per share · Exceptional items
· Adjustments to Gas Production decommissioning provision
· Movements on operating and financing derivatives ("certain
re-measurements")
· Depreciation expense on fair value uplifts
· Deferred tax including share of joint ventures, associates and
non-controlling interests
Rationale for adjustments to profit measures
1. Movement on operating and financing derivatives ("certain
re-measurements")
This adjustment can be designated between operating and financing derivatives.
Operating derivatives are contracts where the Group's SSE Energy Markets
function enters into forward commitments or options to buy or sell
electricity, gas and other commodities to meet the future demand requirements
of the Group's SSE Business Energy and SSE Airtricity operating units, or to
optimise the value of the production from SSE Renewables and Thermal
generation assets or to conduct other trading subject to the value at risk
limits set out by the Energy Markets Risk Committee. Certain of these
contracts (predominantly purchase contracts) are determined to be derivative
financial instruments under IFRS 9 and as such are required to be recorded at
their fair value. Changes in the fair value of those commodity contracts
designated as IFRS 9 financial instruments are reflected in the income
statement (as part of "certain re-measurements"). The Group shows the change
in the fair value of these forward contracts separately as this mark-to-market
movement is not relevant to the underlying performance of its operating
segments due to the volatility that can arise on revaluation. The Group will
recognise the underlying value of these contracts as the relevant commodity is
delivered, which will predominantly be within the subsequent 12 to 24 months.
Conversely, commodity contracts that are not financial instruments under IFRS
9 (predominantly sales contracts) are accounted for as "own use" contracts and
are consequently not recorded until the commodity is delivered and the
contract is settled. Gas inventory purchased by the Group's Gas Storage
business for secondary trading opportunities is also held at fair value with
gains and losses on re-measurement recognised as part of "certain
re-measurements" in the income statement. Finally, the mark-to-market
valuation movements on the Group's contracts for difference contracts entered
into by SSE Renewables that are not designated as government grants and which
are measured as Level 3 fair value financial instruments are also included
within "certain re-measurements".
Financing derivatives include all fair value and cash flow interest rate
hedges, non-hedge accounted (mark-to-market) interest rate derivatives, cash
flow foreign exchange hedges and non-hedge accounted foreign exchange
contracts entered into by the Group to manage its banking and liquidity
requirements as well as risk management relating to interest rate and foreign
exchange exposures. Changes in the fair value of those financing derivatives
are reflected in the income statement (as part of "certain re-measurements").
The Group shows the change in the fair value of these forward contracts
separately as this mark-to-market movement is not relevant to the underlying
performance of its operating segments.
The re-measurements arising from operating and financing derivatives, and the
tax effects thereof, are disclosed separately to aid understanding of the
underlying performance of the Group.
2. Exceptional items
Exceptional charges or credits, and the tax effects thereof, are considered
unusual by nature or scale and of such significance that separate disclosure
is required for the underlying performance of the Group to be properly
understood. Further explanation for the classification of an item as
exceptional is included in note 4.2.
3. Adjustments to Gas Production decommissioning provision
The Group retains an obligation for 60% of the decommissioning liabilities of
its former Gas Production business which was disposed in October 2021. The
revaluation adjustments relating to these decommissioning liabilities are
accounted for through the Group's consolidated income statement and are
removed from the Group's adjusted profit measures as the revaluation of the
provision is not considered to be part of the Group's core continuing
operations.
4. Share of joint ventures and associates' interest and tax
This adjustment can be split between the Group's share of interest and the
Group's share of tax arising from its investments in equity accounted joint
ventures and associates. The Group is required to report profit before
interest and tax ("operating profit") including its share of the profit after
tax from its equity accounted joint ventures and associates. However, for
internal performance management purposes and for consistency of treatment, SSE
reports its adjusted operating profit measures before its share of the
interest and/or tax on joint ventures and associates. The presentation of the
Group's share of profits from equity accounted investments is expected to
change on adoption of IFRS 18 (see note 3.2), at which point it is expected
that the Group's APM reconciliation will also change.
5. Share of joint ventures and associates' depreciation and
amortisation
For management purposes, the Group considers EBITDA ("earnings before
interest, tax, depreciation and amortisation") based on a sum-of-the-parts
derived metric which includes a share of the EBITDA from equity accounted
investments. While this is not equal to adjusted cash generated from operating
activities, it is considered useful by management in assessing a proxy for
such a measure, given the complexity of the Group structure and the range of
investment structures utilised. For the purpose of calculating the "Net Debt
to EBITDA" metric, "adjusted EBITDA" is further refined to remove the
proportion of adjusted EBITDA from equity-accounted joint ventures relating to
off-balance sheet debt (see note 6.3).
6. Depreciation expense on fair value uplifts
The Group's strategy includes the realisation of value (developer gains) from
divestments of stakes in SSE Renewables' offshore and international
developments. In addition, for strategic purposes the Group may also decide to
bring in equity partners to other businesses and assets. Where SSE's interest
in such vehicles changes from full to joint control, and the subsequent
arrangement is classified as an equity accounted joint venture, SSE may
recognise a fair value uplift on the re-measurement of its retained equity
investment. Those non-cash accounting uplifts will be treated as exceptional
gains in the year of the relevant transactions completing. Furthermore, SSE
may acquire businesses or joint venture interests which are determined to
generate an exceptional opening gain on acquisition and accordingly an
exceptional accounting fair value uplift to the opening assets acquired will
be recorded. These uplifts create assets or adjustments to assets, which are
depreciated or amortised over the remaining life of the underlying assets or
contracts in those businesses with the charge being included in the Group's
depreciation and amortisation expense. The Group's adjusted operating profit,
adjusted profit before tax and adjusted earnings per share are therefore
adjusted to exclude any additional depreciation, amortisation and impairment
expense arising from the fair value uplifts given these charges are derived
from significant one-off gains, which are treated as exceptional when
initially recognised.
7. Release of deferred income
The Group deducts the release of deferred income in the year from its adjusted
EBITDA metric as it principally relates to customer contributions against
depreciating assets. As the metric adds back depreciation, the income is also
deducted.
8. Deferred tax
The Group adjusts for deferred tax when arriving at adjusted profit after tax,
adjusted earnings per share and its adjusted effective rate of tax. Deferred
tax arises as a result of differences in accounting and tax bases that give
rise to potential future accounting credits or charges. As the Group remains
committed to its ongoing capital programme, the liabilities associated are not
expected to reverse and accordingly the Group excludes these from its adjusted
profit measures.
9. Results attributable to non-controlling interest holders
The Group's structure includes non-wholly owned but controlled subsidiaries
which are consolidated within the financial statements of the Group. The most
significant of those is SSEN Transmission, a 25% stake in which was divested
on 30 November 2022. The Group has removed the share of profit attributable to
holders of non-controlling equity stakes in all such businesses from the point
when the ownership structure changed from all of its profit measures, to
report all metrics based on the residual share of profits items attributable
to the ordinary equity holders of the Group. The adjustment has been applied
consistently to all of the Group's adjusted profit measures, including
removing proportionate non-controlling share of operating profit and
depreciation and amortisation from the Group's adjusted EBITDA metric;
removing the non-controlling share of operating profit from the Group's
adjusted operating profit metric; removing the non-controlling share of net
finance costs from the Group's adjusted net finance costs metric; and removing
the non-controlling interest share of current tax from the Group's adjusted
current tax metric.
March 2025
Continuing operations (£m) Reported Movement on derivatives Exceptional items Reported before exceptional items and certain re-measure Adjustments to Gas Production decommissioning provision Joint venture interest and tax Depreciation expense on FV uplifts Deferred tax Share of profit attributable to non-controlling interests Adjusted
ments
Operating profit 1,962.2 78.5 309.7 2,350.4 (17.9) 173.3 20.1 - (106.7) 2,419.2
Net finance (costs)/ income (111.3) (12.8) (0.3) (124.4) - (164.3) - - 7.7 (281.0)
Profit before taxation 1,850.9 65.7 309.4 2,226.0 (17.9) 9.0 20.1 - (99.0) 2,138.2
Taxation (518.0) (4.0) (29.7) (551.7) - (9.0) - 276.6 (12.3) (296.4)
Profit after taxation 1,332.9 61.7 279.7 1,674.3 (17.9) - 20.1 276.6 (111.3) 1,841.8
Attributable to other equity holders (143.5) - - (143.5) - - - (41.5) 111.3 (73.7)
Profit attributable to ordinary shareholders 1,189.4 61.7 279.7 1,530.8 (17.9) - 20.1 235.1 - 1,768.1
Number of shares for EPS 1,099.2 1,099.2
Earnings per share (pence) 108.2 160.9
EBITDA
Adjusted operating profit from continuing operations Share of joint ventures and associates' depreciation and amortisation Depreciation expense on FV uplifts Release of deferred income Depreciation, impairment and amortisation before exceptional charges Share of depreciation, impairment and amortisation before exceptional items Adjusted EBITDA
attributable to non-controlling interests
£m £m £m £m £m
£m
£m
2,419.2 226.0 (20.1) (14.1) 776.1 (37.8) 3,349.3
March 2024 (*restated)
Continuing operations (£m) Reported Movement on derivatives Exceptional items Reported before exceptional items and certain re-measure Adjustments to Gas Production decommissioning provision Joint venture interest and tax Depreciation expense on FV uplifts Deferred tax Share of profit attributable to non-controlling interests Adjusted
ments
Operating profit 2,608.2 (507.4) 266.3 2,367.1 9.9 169.5 19.0 - (139.1) 2,426.4
Net finance (costs)/ income (113.1) (6.1) (0.3) (119.5) - (110.7) - - 4.7 (225.5)
Profit before taxation 2,495.1 (513.5) 266.0 2,247.6 9.9 58.8 19.0 - (134.4) 2,200.9
Taxation (610.7) 115.0 (23.3) (519.0) - (58.8) - 198.8 8.0 (371.0)
Profit after taxation 1,884.4 (398.5) 242.7 1,728.6 9.9 - 19.0 198.8 (126.4) 1,829.9
Attributable to other equity holders (173.9) - - (173.9) - - - (25.6) 126.4 (73.1)
Profit attributable to ordinary shareholders 1,710.5 (398.5) 242.7 1,554.7 9.9 - 19.0 173.2 - 1,756.8
Number of shares for EPS 1,091.8 1,091.8
Earnings per share (pence) 156.7 160.9
*The comparative has been restated. See note 2.3.2.
EBITDA
Adjusted operating profit from continuing operations Share of joint ventures and associates' depreciation and amortisation Depreciation expense on FV uplifts Release of deferred income Depreciation, impairment and amortisation before exceptional charges Share of depreciation, impairment and amortisation before exceptional items Adjusted EBITDA
attributable to non-controlling interests
£m £m £m £m £m
£m
£m
2,426.4 208.8 (19.0) (13.0) 724.9 (32.5) 3,295.6
Debt measure
Group APM Purpose Closest equivalent IFRS measure Adjustments to reconcile to primary financial statements
Adjusted Net Debt and Hybrid Capital Debt measure Unadjusted net debt · Cash held and posted as collateral and other deposits
· Lease obligations
· Non-controlling share of borrowings and cash
· Hybrid equity
Rationale for adjustments to debt measure
10. Cash held and posted as collateral and other deposits
Cash held and posted as collateral refers to cash balances received from and
deposited with counterparties including trading exchanges. Collateral balances
mostly represent initial and variation margin, required as part of the
management of the Group's exposures on commodity contracts, that will be
received on maturity of the related trades. Deposits with a maturity of more
than three months are also included in this adjustment. The Group includes
this adjustment to better reflect the immediate cash resources to which it has
access, which in turn better reflects the Group's funding position.
11. Lease obligations
SSE's reported loans and borrowings include lease liabilities on contracts
within the scope of IFRS 16 "Leases", which are not directly related to
external financing of the Group. The Group excludes these liabilities from its
adjusted net debt and hybrid capital measure to better reflect the Group's
underlying funding position with its primary sources of capital.
12. External net debt and cash attributable to non-controlling interests
The Group's structure includes non-wholly owned but controlled subsidiaries
which are consolidated within the financial statements of the Group under
applicable accounting standards. The most significant of those is SSEN
Transmission, a 25% stake in which was divested on 30 November 2022. Following
completion of the transaction, the Group has removed the share of external
debt and cash in these subsidiaries proportionately attributable to the
non-controlling interest holders from its adjusted net debt and hybrid capital
metric. While legal entitlement to these items has not changed, the Group
makes this adjustment to present net debt proportionately attributable to
ordinary equity holders of the Group.
13. Hybrid equity
The characteristics of certain hybrid capital securities mean that they
qualify for recognition as equity rather than debt under applicable accounting
standards. Consequently, their coupon payments are presented within equity
rather than within finance costs. As a result, the coupon payments are not
included in SSE's adjusted profit before tax measure. To present total funding
provided from sources other than ordinary shareholders, SSE presents its
adjusted net debt measure inclusive of hybrid capital to better reflect the
Group's funding position.
March 2025 March 2024
£m £m
Unadjusted net debt (9,513.9) (8,097.8)
Cash (held)/posted as collateral and other deposits (63.3) (353.2)
Lease obligations 455.0 407.5
External net debt attributable to non-controlling interests 817.9 490.2
Adjusted Net Debt (8,304.3) (7,553.3)
Hybrid equity (1,882.4) (1,882.4)
Adjusted Net Debt and Hybrid Capital (10,186.7) (9,435.7)
Capital measures
Group APM Purpose Closest equivalent IFRS measure Adjustments to reconcile to primary financial statements
Adjusted Investment and Capital Expenditure Capital measure Capital additions to intangible assets and property, plant and equipment · Joint ventures and associates' additions funding
· Allowances and certificates
· Customer or third party funded additions
· Lease asset additions
· Non-controlling share of capital expenditure
· Additions acquired through business combinations
Adjusted Investment, Capital and Acquisition Expenditure Capital measure Capital additions to intangible assets and property, plant and equipment · Joint ventures and associates' additions funding
· Allowances and certificates
· Customer or third party funded additions
· Lease asset additions
· Non-controlling share of capital expenditure
· Additions acquired through business combinations
· Acquisition cash consideration
Rationale for adjustments to capital measures
14. Joint ventures and associates' additions funding
Joint ventures and associates' additions included in the Group's capital
measures represent the direct loan or equity funding provided by the Group to
joint venture and associate arrangements in relation to capital expenditure
projects. This has been included to better reflect the Group's use of directly
funded equity accounted vehicles to grow the Group's asset base. Asset
additions funded by project finance raised within the Group's joint ventures
and associates are not included in this adjustment.
15. Allowances and certificates
Allowances and certificates consist of purchased carbon emissions allowances
and generated or purchased renewable source of generation certificates such as
renewable obligations certificates ("ROCs"). Additions in the year are not
included in the Group's "capital expenditure and investment" APM to better
reflect the Group's investment in enduring operational assets.
16. Customer or third party funded additions
Customer or third party funded additions represents additions to the Group's
electricity and other networks that are financed by cash provided by third
parties. Given these are directly funded by customers or third parties, these
additions have been excluded to better reflect the Group's underlying
investment position.
17. Lease additions
Additions of right of use assets under the Group's IFRS 16 compliant policies
for lease contracts are excluded from the Group's adjusted capital measures as
they do not represent directly funded capital investment. This is consistent
with the treatment of lease obligations explained at 11, above.
18. Non-controlling interest share of capital expenditure
The Group's structure includes non-wholly owned but controlled subsidiaries
which are consolidated within the financial statements of the Group. The most
significant of those is SSEN Transmission, a 25% stake in which was divested
on 30 November 2022. The Group has removed the share of capital additions
attributable proportionately to these equity holders from its "adjusted
investment and capital expenditure" and "adjusted investment, capital and
acquisition expenditure" metrics. This is consistent with the adjustments
noted elsewhere related to these non-controlling interests.
19. Additions acquired through business combinations
Where the Group acquires an early-stage development company which is
classified as the acquisition of an asset, or group of assets and not the
acquisition of a business, the acquisition is treated as an addition to
intangible assets or property, plant and equipment and is included within
"adjusted investment and capital expenditure". Where the Group acquires an
established business or interest in an equity-accounted joint venture
requiring a fair value assessment in line with the principles of IFRS 3
"Business Combinations", the fair value of acquired consolidated tangible or
intangible assets is excluded from the Group's "adjusted investment and
capital expenditure", as they are not direct capital expenditure by the Group.
However, the fair valuation of consideration paid for the business or
investment is included in the Group's "adjusted investment, capital and
acquisition expenditure" metric, see 20 below. During the current and prior
year there were no significant business acquisitions.
20. Acquisition cash consideration in relation to business combinations
The Group has outlined a significant investment programme which will partly be
achieved through the acquisition of businesses with development opportunities
for the Group. The cash consideration paid for these entities is included
within the Group's "adjusted investment, capital and acquisition expenditure"
metric as it provides stakeholders an accurate basis of cash investment into
the Group's total development pipeline and is consistent with the reporting of
the Group's Net Zero Acceleration Programme Plus. During the current and prior
year there were no significant business acquisitions.
March 2025 March 2024
£m £m
Capital additions to intangible assets 1,045.5 1,314.2
Capital additions to property, plant and equipment 2,791.5 1,971.4
Capital additions to intangible assets and property, plant and equipment 3,837.0 3,285.6
Joint ventures and associates' additions 288.0 390.0
Allowances and certificates (603.7) (774.5)
Customer or third party funded additions (163.4) (152.0)
Lease asset additions (126.7) (73.0)
Non-controlled interests share of capital expenditure (320.8) (199.4)
Adjusted Investment and Capital Expenditure 2,910.4 2,476.7
Adjusted Investment, Capital and Acquisition Expenditure 2,910.4 2,476.7
Summary Financial Statements
Consolidated Income Statement
for the year ended 31 March 2025
2025 2024
Before Exceptional items and Total Before Exceptional items and Total
exceptional certain exceptional certain
items and re-measure-ments items and re-measure-ments
certain (note 7) certain (note 7)
re-measure- ments re-measure-ments
Note £m £m £m £m £m £m
Continuing operations
Revenue 6 10,131.9 - 10,131.9 10,457.2 - 10,457.2
Cost of sales (6,210.9) (57.4) (6,268.3) (6,568.3) 461.3 (6,107.0)
Gross profit/(loss) 3,921.0 (57.4) 3,863.6 3,888.9 461.3 4,350.2
Operating costs (1,742.0) (309.7) (2,051.7) (1,577.7) (270.9) (1,848.6)
Debt impairment charges (47.1) - (47.1) (128.8) - (128.8)
Other operating income 107.5 - 107.5 116.7 4.6 121.3
Operating profit/(loss) before joint ventures and associates 2,239.4 (367.1) 1,872.3 2,299.1 195.0 2,494.1
Joint ventures and associates:
Share of operating profit 284.3 - 284.3 237.5 - 237.5
Share of interest (164.3) - (164.3) (110.7) - (110.7)
Share of movement in derivatives - (28.1) (28.1) - 61.4 61.4
Share of tax (9.0) 7.0 (2.0) (58.8) (15.3) (74.1)
Share of profit on joint ventures and associates 111.0 (21.1) 89.9 68.0 46.1 114.1
Operating profit/(loss) 6 2,350.4 (388.2) 1,962.2 2,367.1 241.1 2,608.2
Finance income 8 194.8 13.1 207.9 198.8 6.4 205.2
Finance costs 8 (319.2) - (319.2) (318.3) - (318.3)
Profit/(loss) before taxation 2,226.0 (375.1) 1,850.9 2,247.6 247.5 2,495.1
Taxation 9 (551.7) 33.7 (518.0) (519.0) (91.7) (610.7)
Profit/(loss) for the year 1,674.3 (341.4) 1,332.9 1,728.6 155.8 1,884.4
Attributable to:
Ordinary shareholders of the parent 1,530.8 (341.4) 1,189.4 1,554.7 155.8 1,710.5
Non-controlling interests 69.8 - 69.8 100.8 - 100.8
Other equity holders 73.7 - 73.7 73.1 - 73.1
Earnings per share
Basic (pence) 11 108.2 156.7
Diluted (pence) 11 108.1 156.5
Dividends
Interim dividend paid per share (pence) 10 21.2 20.0
Proposed final dividend per share (pence) 10 43.0 40.0
64.2 60.0
The accompanying notes are an integral part of the financial information in
this announcement.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2025
2025 2024
£m £m
Profit for the year - continuing operations 1,332.9 1,884.4
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss:
Net gains on cash flow hedges 48.1 6.5
Transferred to assets and liabilities on cash flow hedges 10.0 2.1
Taxation on cashflow hedges (11.3) (0.3)
46.8 8.3
Share of other comprehensive loss of joint ventures and associates, net of (16.7) (40.9)
taxation
Exchange difference on translation of foreign operations (42.9) (66.6)
Gain on net investment hedge 36.0 30.9
23.2 (68.3)
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on retirement benefit schemes, net of taxation 39.6 (116.4)
Share of other comprehensive income of joint ventures and associates, net of 15.8 -
taxation
(Loss)/gain on revaluation of investments in equity instruments, net of (0.3) 3.5
taxation
55.1 (112.9)
Other comprehensive gain/(loss), net of taxation 78.3 (181.2)
Total comprehensive income for the year - continuing operations 1,411.2 1,703.2
Attributable to:
Ordinary shareholders of the parent 1,263.6 1,529.3
Non-controlling interests 73.9 100.8
Other equity holders 73.7 73.1
1,411.2 1,703.2
The accompanying notes are an integral part of the financial information in
this announcement.
Consolidated Balance Sheet
as at 31 March 2025
Note 2025 2024
£m £m
Assets (restated*)
Property, plant and equipment 18,824.1 16,611.5
Goodwill and other intangible assets 2,170.5 2,324.6
Equity investments in joint ventures and associates 1,987.3 1,963.2
Loans to joint ventures and associates 1,510.3 1,352.9
Other investments 8.8 3.2
Other receivables 199.9 170.1
Derivative financial assets 63.5 64.2
Retirement benefit assets 15 501.8 421.6
Non-current assets 25,266.2 22,911.3
Intangible assets 392.7 754.7
Inventories 462.9 343.0
Trade and other receivables 2,943.2 2,654.1
Current tax asset 29.7 35.1
Cash and cash equivalents 1,090.5 1,035.9
Derivative financial assets 178.4 536.1
Current assets 5,097.4 5,358.9
Total assets 30,363.6 28,270.2
Liabilities
Loans and other borrowings 13 1,964.0 1,128.0
Trade and other payables 2,897.9 3,322.5
Current tax liabilities - 9.3
Financial guarantee liabilities 2.4 3.1
Provisions 80.5 52.7
Derivative financial liabilities 126.3 345.2
Current liabilities 5,071.1 4,860.8
Loans and other borrowings 13 8,640.4 8,005.7
Deferred tax liabilities 1,844.5 1,536.8
Trade and other payables 1,247.9 1,092.8
Financial guarantee liabilities 23.1 36.4
Provisions 676.1 712.4
Derivative financial liabilities 167.7 222.2
Non-current liabilities 12,599.7 11,606.3
Total liabilities 17,670.8 16,467.1
Net assets 12,692.8 11,803.1
Equity
Share capital 14 555.6 548.1
Share premium 812.6 820.1
Capital redemption reserve 52.6 52.6
Hedge reserve 432.7 407.6
Translation reserve (8.6) (2.6)
Retained earnings 8,336.7 7,540.0
Equity attributable to ordinary shareholders of the parent 10,181.6 9,365.8
Hybrid equity 14 1,882.4 1,882.4
Attributable to non-controlling interests 628.8 554.9
Total equity 12,692.8 11,803.1
*The comparative has been restated. See note 2.3.3.
The accompanying notes are an integral part of the financial information in
this announcement.
Consolidated Statement of Changes in Equity
for the year ended 31 March 2025
Share capital Share premium Capital redemption reserve Hedge reserve Translation reserve Retained earnings Total attributable to ordinary shareholders Hybrid equity Total equity before non-controlling interests Non-controlling interests Total equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 April 2024 (restated*) 548.1 820.1 52.6 407.6 (2.6) 7,540.0 9,365.8 1,882.4 11,248.2 554.9 11,803.1
Profit for the year - - - - - 1,189.4 1,189.4 73.7 1,263.1 69.8 1,332.9
Other comprehensive income/(loss) - - - 25.1 (6.0) 55.1 74.2 - 74.2 4.1 78.3
Total comprehensive income for the year - - - 25.1 (6.0) 1,244.5 1,263.6 73.7 1,337.3 73.9 1,411.2
Dividends to shareholders - - - - - (671.0) (671.0) - (671.0) - (671.0)
Scrip dividend related share issue 7.5 (7.5) - - - 268.9 268.9 - 268.9 - 268.9
Issue of treasury shares - - - - - 17.8 17.8 - 17.8 - 17.8
Distributions to Hybrid equity holders - - - - - - - (73.7) (73.7) - (73.7)
Share buyback - - - - - (71.7) (71.7) - (71.7) - (71.7)
Credit in respect of employee share awards - - - - - 22.3 22.3 - 22.3 - 22.3
Investment in own shares - - - - - (14.1) (14.1) - (14.1) - (14.1)
At 31 March 2025 555.6 812.6 52.6 432.7 (8.6) 8,336.7 10,181.6 1,882.4 12,064.0 628.8 12,692.8
Consolidated Statement of Changes in Equity
for the year ended 31 March 2024
Share capital Share premium Capital redemption reserve Hedge reserve Translation reserve Retained earnings Total attributable to ordinary shareholders Hybrid equity Total equity before non-controlling interests Non-controlling interests Total equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 April 2023 (restated*) 547.0 821.2 52.6 441.2 32.1 6,852.6 8,746.7 1,882.4 10,629.1 454.1 11,083.2
Profit for the year - - - - - 1,710.5 1,710.5 73.1 1,783.6 100.8 1,884.4
Other comprehensive loss - - - (33.6) (34.7) (112.9) (181.2) - (181.2) - (181.2)
Total comprehensive income for the year - - - (33.6) (34.7) 1,597.6 1,529.3 73.1 1,602.4 100.8 1,703.2
Dividends to shareholders - - - - - (956.4) (956.4) - (956.4) - (956.4)
Scrip dividend related share issue 1.1 (1.1) - - - 38.6 38.6 - 38.6 - 38.6
Issue of treasury shares - - - - - 9.2 9.2 - 9.2 - 9.2
Distributions to Hybrid equity holders - - - - - - - (73.1) (73.1) - (73.1)
Credit in respect of employee share awards - - - - - 20.2 20.2 - 20.2 - 20.2
Investment in own shares - - - - - (21.8) (21.8) - (21.8) - (21.8)
At 31 March 2024 (restated*) 548.1 820.1 52.6 407.6 (2.6) 7,540.0 9,365.8 1,882.4 11,248.2 554.9 11,803.1
*The comparative has been restated. See note 2.3.3.
Consolidated Cash Flow Statement
for the year ended 31 March 2025
Note 2025 2024
£m £m
Operating profit - continuing operations 6 1,962.2 2,608.2
Less share of profit of joint ventures and associates (89.9) (114.1)
Operating profit before jointly controlled entities and associates 1,872.3 2,494.1
Pension service charges less contributions paid (6.7) (9.5)
Movement on operating derivatives 60.1 (443.4)
Depreciation, amortisation, write downs and impairments 1,057.1 859.0
Impairment of joint venture investment including shareholder loans - 136.8
Charge in respect of employee share awards 22.3 20.2
Profit on disposal of assets and businesses (47.9) (9.0)
Charge in respect of provisions 6.4 14.6
Credit in respect of financial guarantees (1.9) (12.5)
Release of deferred income (14.1) (13.0)
Cash generated from operations before working capital movements 2,947.6 3,037.3
(Increase)/decrease in inventories (109.5) 39.6
Decrease in receivables 2.6 763.1
(Decrease)/increase in payables (196.0) 243.0
Decrease in provisions (23.7) (33.9)
Cash generated from operations 2,621.0 4,049.1
Dividends received from investments 200.6 223.7
Interest paid (104.2) (67.0)
Taxes paid (240.6) (345.8)
Net cash from operating activities 2,476.8 3,860.0
Purchase of property, plant and equipment 6 (2,689.2) (1,970.3)
Purchase of other intangible assets 6 (441.8) (542.2)
Receipt of government grant income 6 55.7 93.4
Deferred income received 20.2 17.4
Proceeds from disposals 25.2 14.9
Purchase of businesses, joint ventures and subsidiaries - (42.9)
Loans and equity provided to joint ventures and associates (408.3) (443.6)
Loans and equity repaid by joint ventures 121.7 14.6
(Increase)/decrease in other investments (1.9) 0.4
Net cash used in investing activities (3,318.4) (2,858.3)
Proceeds from issue of share capital 14 17.8 9.2
Dividends paid to company's equity holders 10 (402.1) (917.8)
Share buybacks (71.7) -
Hybrid equity dividend payments 14 (73.7) (73.1)
Employee share awards share purchase 14 (14.1) (21.8)
New borrowings 2,592.2 1,982.2
Repayment of borrowings (1,162.2) (1,842.7)
Settlement of cashflow hedges 10.0 6.4
Net cash from/(used in) financing activities 896.2 (857.6)
Net increase in cash and cash equivalents 54.6 144.1
Cash and cash equivalents at the start of year 1,035.9 891.8
Net increase in cash and cash equivalents 54.6 144.1
Cash and cash equivalents at the end of year 1,090.5 1,035.9
The accompanying notes are an integral part of the financial information in
this announcement.
Notes to the Summary Financial Statements
for the year ended 31 March 2025
1. Financial information
The financial information set out in this announcement does not constitute the
Group's consolidated financial statements for the years ended 31 March 2025 or
2024 but is derived from those accounts. Consolidated financial statements for
the year ended 31 March 2024 were delivered to the Registrar of Companies, and
those for the year ended 31 March 2025 will be delivered in due course. The
auditors have reported on the consolidated financial statements for each of
the years ended 31 March 2024 and 31 March 2025 and their reports were (i)
unqualified; (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report;
and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006. This preliminary announcement was authorised by the
Board on 20 May 2025.
2. Basis of preparation and presentation
2.1 Basis of preparation
The financial information set out in this announcement has been extracted from
the consolidated financial statements of SSE plc for the year ended 31 March
2025. These consolidated financial statements were prepared under the
historical cost convention, except for certain assets and liabilities measured
at their fair value and the liabilities of the Group's pension schemes which
are measured using the projected unit credit method, in conformity with the
requirements of the Companies Act 2006 and in accordance with UK-adopted
International Accounting Standards ("IAS"). This consolidated financial
information has been prepared on the basis of accounting policies consistent
with those applied in the consolidated financial statements for the year ended
31 March 2025 unless expressly stated otherwise.
The Directors consider that the Group has adequate resources to continue in
operational existence for the period to 31 December 2026. The consolidated
financial statements are therefore prepared on a going concern basis with the
basis for that conclusion explained in the consolidated financial statements
at note A6.3.
The Summary Financial Statements are presented in pounds Sterling and all
values are rounded to the nearest million to one decimal place (£m), unless
otherwise stated.
2.2 Basis of presentation
The Group applies the use of adjusted accounting measures or alternative
performance measures ("APMs") throughout these statements. These measures
enable the Directors to present the underlying performance of the Group and
its segments to the users of the statements in a consistent and meaningful
manner. The adjustments applied and certain terms such as "adjusted operating
profit", "adjusted earnings per share", "adjusted EBITDA", "adjusted
investment and capital expenditure", "adjusted investment, capital and
acquisition expenditure" and "adjusted net debt and hybrid capital" that are
not defined under IFRS and are explained in more detail in note 4.
2.3 Changes to presentation and prior year adjustments
The prior year comparatives at 31 March 2024 have been restated as follows:
2.3.1 Segments
In accordance with the requirements of IFRS 8 "Operating Segments" the Group
aligns its segmental disclosures with its internal reporting to the Group
Executive Committee (the Chief Operating Decision Maker). The reporting of
these operating segments is used to assess operating performance and to make
decisions on how to allocate capital. During the year to 31 March 2025, the
Group's Enterprise business was integrated into its SSE Business Energy, SSE
Thermal and SSE Energy Markets operating segments. Consequently, the segmental
results reported within these Summary Financial Statements have been restated
with effect from 1 April 2023. Details of the main activities reallocated from
SSE Enterprise into the Group's other segments are provided in note 6.
Comparative segmental information in note 6 has been restated to reflect the
change to these segments. The impacts of the restatements are a decrease to
the adjusted operating profit of SSE Business Energy (2024: £40.6m), an
increase to the adjusted operating profit of SSE Thermal (2024: £16.4m) and a
decrease in the adjusted operating profit of SSE Energy Markets (2024: £1.4m)
and a decrease to the adjusted EBITDA of SSE Business Energy (2024: £36.5m),
an increase to the adjusted EBITDA of SSE Thermal (2024: £22.0m) and a
decrease in the adjusted EBITDA of SSE Energy Markets (2024: £1.4m). The
reported operating profit by segment has been restated by the same amounts.
Additionally, adjusted capital expenditure has been restated with an increase
to SSE Business Energy (2024: £40.9m), SSE Thermal (2024: £9.6m) and SSE
Energy Markets (2024: £0.5m) and revenue has been restated with an increase
to SSE Business Energy (2024: £63.5m) and SSE Thermal (2024: £28.4m).
This restatement has had no impact on the consolidated adjusted performance
measures of the Group at 31 March 2024.
2.3.2 Alternative Performance Measures ("APMs") - adjustment for net
interest on net pension assets/liabilities
During the year the Group simplified its adjusted profit metrics by removing
the adjustment for interest on net pension assets/liabilities valued under IAS
19 "Employee Benefits". This adjustment is no longer deemed necessary by
management as the pension interest adjustment is less volatile and material to
the Group than it was when first introduced as an APM adjustment. The
impacts of the restatements for 31 March 2024 are an increase in the adjusted
profit before tax of £26.2m and adjusted earnings per share of 2.4 pence.
There have been no other changes to the Group's APMs in the current year.
2. Basis of preparation and presentation (continued)
2.3.3 Non-controlling interest presentation change
After reconsidering the accounting for sale of the 25% non-controlling stake
in Scottish Hydro Electric Transmission plc, which the Group disposed of in
the year ending 31 March 2023, the comparative balance sheets and statements
of changes in equity have been restated to increase retained earnings by
£195.0m (with a corresponding decrease in non-controlling interests)
representing the gain recognised in equity on that transaction. Comparatives
at 1 April 2023, 31 March 2024 have been restated accordingly. This adjustment
had no impact on net assets, the income statement, statement of cashflows or
adjusted performance measures of the Group, at any reporting date.
2.4 Changes to estimates
On 31 March 2025, the Group's Thermal business reviewed the useful economic
life of the Peterhead, Keadby and Medway CCGT assets. The review confirmed the
technical capability of the assets to continue to operate until at least 2035.
Noting also the recommendations of the UK Government's UK Clean Power 2030
Action Plan and the Group's ongoing success in the capacity markets it is
expected that the assets will continue to generate economic benefit in this
period. As a result, the useful economic lives of the assets have been
extended to 2035. The change in useful economic life had no impact on the
depreciation charge for the year ended 31 March 2025, but will reduce the
depreciation charge for the year ending 31 March 2026 by £14.2m.
3. New accounting policies and reporting changes
The basis of consolidation and principal accounting policies applied in the
preparation of these Summary Financial Statements are set out below and
included within A1 Accompanying Information to the Group's consolidated
financial statements.
3.1 New standards, amendments and interpretations effective or
adopted by the Group
During the year ended 31 March 2025, the Group adopted the amendments to:
· IAS 1 "Presentation of Financial Statements" in relation to
non-current liabilities with covenants
· IFRS 16 "Leases" in relation to a lease on sale and leaseback
· IAS 7 "Statement of Cash Flows" and IFRS 7 "Financial
Instruments: Disclosures" in relation to supplier finance arrangements'
Adoption of these other amendments had no material impact on these Summary
Financial Statements. There were no other standards, amendments to standards
or interpretations relevant to the Group's operations which were adopted
during the year.
3.2 New standards, amendments and interpretations issued, but not
yet adopted by the Group
IFRS 18 "Presentation and Disclosure in Financial Statements" was issued in
April 2024 and will be effective from 1 January 2027 (1 April 2027 for the
Group), subject to UK endorsement. This standard will replace IAS 1
"Presentation of Financial Statements." The new standard does not amend the
principles of recognition and measurement and so will not impact the financial
results of the Group. However, it will impact the presentation of the
consolidated financial statements, in particular the Consolidated Income
Statement.
While the Group is continuing to assess the full impact of adoption of the
standard, it is expected that the presentation of the Consolidated Income
Statement will be amended to include the new subtotals prescribed in the
standard. The share of profit recognised from equity accounted investments
will be classified within investing activities, instead of its current
classification within operating activities. It is expected that certain notes
to the consolidated financial statements will also be amended to comply with
aggregation and disaggregation principles.
Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial
Instruments: Disclosures" in relation to the classification and measurement of
financial instruments have been issued. An additional amendment has also been
made to both standards in relation to contracts referencing nature-dependent
electricity. These amendments will be effective from 1 January 2026 (1 April
2026 for the Group). While the impact of adoption is continuing to be
assessed, it is not expected the amendments will have a material impact on the
Group's consolidated financial statements.
4. Adjusted accounting measures
The Group applies the use of adjusted accounting measures or alternative
performance measures ("APMs") throughout the Annual Report and Financial
Statements. These measures enable the Directors to present the underlying
performance of the Group and its segments to the users of the statements in a
consistent and meaningful manner. The adjustments applied and certain terms
such as "adjusted operating profit", "adjusted earnings per share", "adjusted
EBITDA", "adjusted investment and capital expenditure", "adjusted investment,
capital and acquisition expenditure" and "adjusted net debt and hybrid
capital" are not defined under IFRS and are explained in more detail below. In
addition, the section "Alternative Performance Measures" at page 39 provides
further context and explanation of these terms.
4.1 Adjusted measures
The Directors assess the performance of the Group and its reportable segments
based on "adjusted measures". These measures are used for internal performance
management and are believed to be appropriate for explaining underlying
performance to users of the accounts. These measures are also deemed to be the
most useful for ordinary shareholders of the Company and for other
stakeholders.
4. Adjusted accounting measures (continued)
4.1 Adjusted measures (continued)
The performance of the reportable segments is reported based on adjusted
profit before interest and tax ("adjusted operating profit"). This is
reconciled to reported profit before interest and tax by adding back
exceptional items and certain re-measurements (see note 4.2 below),
depreciation expense on fair value uplifts, the share of operating profit
attributable to non-controlling interests, adjustments to the Gas Production
decommissioning provision and after the removal of interest and taxation on
profits from equity-accounted joint ventures and associates.
The performance of the Group is reported based on adjusted profit before tax
which excludes exceptional items and certain re-measurements (see note 4.2
below), depreciation expense on fair value uplifts, the share of profit before
tax attributable to non-controlling interests, adjustments to the Gas
Production decommissioning provision and taxation on profits from
equity-accounted joint ventures and associates.
The Group also uses adjusted earnings before interest, taxation, depreciation
and amortisation ("adjusted EBITDA") as an alternative operating performance
measure which acts as a management proxy for cash generated from operating
activities. This does not take into account the rights and obligations that
SSE has in relation to its equity-accounted joint ventures and associates.
This measure excludes exceptional items and certain re-measurements (see note
4.2 below), the depreciation charged on fair value uplifts, the share of
EBITDA attributable to non-controlling interests, adjustments to the Gas
Production decommissioning provision, depreciation and amortisation from
equity-accounted joint ventures and associates and interest and taxation on
profits from equity-accounted joint ventures and associates. For the purpose
of calculating the "Net Debt to EBITDA" metric, "adjusted EBITDA" is further
adjusted to remove the proportion of adjusted EBITDA from equity-accounted
joint ventures relating to off-balance sheet debt (see note 6.3).
The Group's key performance measure is adjusted earnings per share ("EPS"),
which is based on basic earnings per share before exceptional items and
certain re-measurements (see note 4.2 below), depreciation on fair value
uplifts, adjustments to the Gas Production decommissioning provision and after
the removal of deferred taxation and other taxation items. Deferred taxation
is excluded from the Group's adjusted EPS because of the Group's significant
ongoing capital investment programme, which means that the deferred tax is
unlikely to reverse. Adjusted profit after tax is presented on a basis
consistent with adjusted EPS except for the non-inclusion of payments to
holders of hybrid equity.
The Summary Financial Statements also include an "adjusted net debt and hybrid
capital" measure. This presents financing information on the basis used for
internal liquidity risk management. This measure excludes obligations due
under lease arrangements and the share of net debt attributable to
non-controlling interests, and includes cash held and posted as collateral on
commodity trading exchanges, and other deposits with a maturity of more than
three months. The measure represents the capital owed to investors, lenders
and equity holders other than the ordinary shareholders. As with "adjusted
earnings per share", this measure is considered to be of relevance to the
ordinary shareholders of the Group as well as other stakeholders and
interested parties.
Finally, the financial statements include an "adjusted investment and capital
expenditure" and an "adjusted investment, capital and acquisition expenditure"
measure. These metrics represent the capital invested by the Group in projects
that are anticipated to provide a return on investment over future years, or
which otherwise support Group operations and are consistent with internally
applied metrics. They therefore include capital additions to property, plant
and equipment and intangible assets and the Group's direct funding of joint
venture and associates' capital projects. The Group has considered it
appropriate to report these values both internally and externally in this
manner due to its use of equity-accounted investment vehicles to grow the
Group's asset base and to highlight where the Group is providing funding to
the vehicle through either loans or equity. The Group does not include project
funded capital additions in these metrics, nor does it include other capital
invested in joint ventures and associates. In addition, the Group excludes
additions to its property, plant and equipment funded by Customer
Contributions and additions to intangible assets associated with allowances
and certificates. The Group also excludes the share of investment and capital
expenditure attributable to non-controlling interests in controlled but not
wholly owned subsidiaries and disposed or impaired additions. The "adjusted
investment, capital and acquisition expenditure" measure also includes cash
consideration paid by the Group in business combinations which contribute to
growth of the Group's capital asset base and is considered to be relevant
metric in context of the Group's Net Zero Acceleration Programme Plus. As with
"adjusted earnings per share", these measures are considered to be of
relevance to management and to the ordinary shareholders of the Group as well
as to other stakeholders and interested parties.
Reconciliations from reported measures to adjusted measures along with further
description of the rationale for those adjustments are included in the
"Alternative Performance Measures" section at pages 39 to 45 before the
Summary Financial Statements.
4.2 Exceptional items and certain re-measurements
Exceptional items are those charges or credits that are considered unusual by
nature and/or scale and of such significance that separate disclosure is
required for the financial statements to be properly understood. The trigger
points for recognition of items as exceptional items will tend to be
non-recurring, although exceptional charges (or credits) may impact the same
asset class or segment over time.
Examples of items that may be considered exceptional include material asset,
investment or business impairment charges; reversals of historic exceptional
impairments; certain business restructuring and reorganisation costs;
significant realised gains or losses on disposal; unrealised fair value
adjustments on acquisition or disposals; and provisions in relation to
significant disputes and claims.
4. Adjusted accounting measures (continued)
4.2 Exceptional items and certain re-measurements (continued)
The Group operates a policy framework for establishing whether items should be
considered exceptional. This framework, which is reviewed annually, is based
on the materiality of the item, by reference to the Group's key performance
measure of adjusted earnings per share. This framework estimates that any
qualifying item greater than £40.0m (2024: £40.0m) will be considered
exceptional, with the exception of any strategic restructuring of activities
or discontinued operations, which will respectively be considered on a
case-by-case basis or will always be treated as exceptional. The only further
exception to this threshold is for gains or losses on disposal, or divestment
of early-stage international or offshore wind farm development projects within
SSE Renewables, which are considered non-exceptional in line with the Group's
strategy to generate recurring gains from developer divestments. Where a
qualifying gain arises on a non-cash transaction, the gain is still treated as
exceptional.
Certain re-measurements are re-measurements arising on certain commodity,
interest rate and currency contracts which are accounted for as held for
trading or as fair value hedges in accordance with the Group's policy for such
financial instruments; re-measurements on stocks of commodities held at the
balance sheet date; or movements in fair valuation of contracts for difference
not designated as government grants. The amount recorded in the adjusted
results for these contracts is the amount settled in the year as disclosed in
note 16.
This excludes commodity contracts not treated as financial instruments under
IFRS 9 where the contracts are held for the Group's own use requirements; the
fair value of these contracts is not recorded and the value associated with
the contract is not recognised until the underlying commodity is delivered.
The impact of changes in corporation tax rates on deferred tax balances are
also included within certain re-measurements.
4.3 Other additional disclosures
As permitted by IAS 1 "Presentation of Financial Statements", the Group's
income statement discloses additional information in respect of joint ventures
and associates, exceptional items and certain re-measurements to aid
understanding of the Group's financial performance and to present results
clearly and consistently.
5. Accounting judgements and estimation uncertainty
In the process of applying the Group's accounting policies, management is
required to make judgements and estimates that will have a significant effect
on the amounts recognised in the financial statements. Changes in the
assumptions underlying the estimates could result in a significant impact to
the financial statements. The Group's key accounting judgement and estimation
areas are noted below, with the most significant and material financial
judgement areas that are specifically considered by the Audit Committee
highlighted separately.
The Group has made no changes to its significant accounting judgements and
identified no new areas of estimation uncertainty during the year. As there is
no provision for uncertain tax positions within the financial statements in
the current or comparative years (2024 and 2023: £nil) and noting the Group's
current view on such matters, this estimation uncertainty has been removed
from the disclosure of estimates that could result in a significant impact on
the financial statements.
5.1 Significant financial judgements and estimation uncertainties
The preparation of the Group's Summary Financial Statements has specifically
considered the following significant financial judgements, some of which are
also areas of estimation uncertainty as noted below.
i) Impairment testing and valuation of certain non-current
assets - financial judgement and estimation uncertainty
The Group reviews the carrying amounts of its goodwill, other intangible
assets, specific property, plant and equipment and investment assets to
determine whether any impairments or reversal of impairments to the carrying
value of those assets requires to be recorded. Where an indicator of
impairment or impairment reversal exists, the recoverable amount of those
assets is determined by reference to value in use calculations or fair value
less cost to sell assessments. As well as its goodwill balances, the specific
assets under review in the year ended 31 March 2025 are intangible development
assets in Southern Europe and Japan; and specific property, plant and
equipment assets related to gas storage at Aldbrough and Atwick and the
Group's thermal power station at Great Island in Ireland. In addition, the
Group performed an impairment review over the carrying value of its equity
investments in Neos Networks Limited and Triton Power Holdings Limited.
In conducting its reviews, the Group makes judgements and estimates
determining both the level of cash generating unit ("CGU") at which common
assets such as goodwill are assessed against, as well as the estimates and
assumptions behind the calculation of recoverable amount of the respective
assets or CGUs.
Changes to the estimates and assumptions on factors such as regulation and
legislation changes (including relevant climate change related regulation),
power, gas, carbon and other commodity prices, volatility of gas prices, plant
running regimes and load factors, discount rates and other inputs could impact
the assessed recoverable value of assets and CGUs and consequently impact the
Group's income statement and balance sheet.
ii) Retirement benefit obligations - estimation uncertainty
The assumptions in relation to the cost of providing post-retirement benefits
during the year are based on the Group's best estimates and are set after
consultation with qualified actuaries. While these assumptions are believed to
be appropriate, a change in these assumptions would impact the level of the
retirement benefit obligation recorded and the cost to the Group of
administering the schemes.
5. Accounting judgements and estimation uncertainty
(continued)
5.1 Significant financial judgements and estimation uncertainties
(continued)
ii) Retirement benefit obligations - estimation uncertainty
(continued)
Further detail of the calculation basis and key assumptions used, the
resulting movements in obligations, and the sensitivity of key assumptions to
the obligation is disclosed at note 23 in the Group's consolidated financial
statements.
iii) Revenue recognition - Customers unbilled supply of
energy - estimation uncertainty
Revenue from energy supply activities undertaken by the SSE Business Energy
and SSE Airtricity businesses includes an estimate of the value of electricity
or gas supplied to customers between the date of the last meter reading and
the year end. This estimation comprises both billed revenue and unbilled
revenue and is calculated based on applying the tariffs and contract rates
applicable to customers against aggregated estimated customer consumption,
taking account of various factors including tariffs, consumption patterns,
customer mix, metering data, operational issues relating to the billings
process and externally notified aggregated volumes supplied to customers from
national settlements bodies.
The Group's SSE Business Energy segment completed the migration of customers
to a new billing platform during the current financial year. Following the
completion of the migration, the billing platform performance has stabilised
and resulted in a lower level of unbilled sales at 31 March 2025. The level of
judgement applied in determining the sales accrual has also lessened compared
to the position at March 2024. For the prior year end, the Group recognised a
provision against the sales accrual to reflect that customer billing delays
may result in a deterioration in collection performance. No comparable risk
provision was recognised at 31 March 2025 and it is expected that the level of
judgement applied will be reduced in future reporting periods as operational
performance continues to improve.
This unbilled estimation is subject to an internal corroboration process which
compares calculated unbilled volumes to a theoretical "perfect billing"
benchmark measure of unbilled volumes (in GWh and millions of therms) derived
from historical consumption patterns and aggregated metering data used in
industry reconciliation processes. Unbilled revenue is compared to billings in
the period between the balance sheet date and the finalisation of the
financial statements which has provided evidence of post report date billings
and hence support to the accrual recognised.
Given the requirement of management to apply judgement, the estimated revenue
accrual remains a significant estimate made by management in preparing the
financial statements. A change in the assumptions underpinning the unbilled
calculation would have an impact on the amount of revenue recognised in any
given period.
iv) Valuation of other receivables - financial judgement and
estimation uncertainty
The Group holds a £100m loan note due from Ovo Holdings Limited (a subsidiary
of Energy Transition Holdings Limited ("ETHL")) following the disposal of SSE
Energy Services on 15 January 2020. The loan is repayable in full by 31
December 2029, carries interest at 13.25% and is presented cumulative of
accrued interest payments, discounted at 13.25%. At 31 March 2025, the
carrying value (net of expected credit loss provision of £1.8m (2024:
£1.6m)) is £193.5m (2024: £170.1m).
The Group has assessed recoverability of the loan note receivable and has
recognised a provision for expected credit loss in accordance with the
requirements of IFRS 9. The Group's assessment of the recoverability of the
loan note is considered a significant financial judgement. The Group has taken
appropriate steps to assess all available information in respect of the
recoverability of the loan note. Procedures included reviewing recent
financial information of ETHL, including the 31 December 2023 consolidated
financial statements; and discussions with ETHL management. While the carrying
value is considered to be appropriate, changes in economic conditions could
lead to a change in the expected credit loss incurred by the Group in future
periods.
v) Impact of climate change and the transition to net zero -
financial judgement and estimation uncertainty
Climate change and the transition to net zero have been considered in the
preparation of these financial statements. Where relevant, assumptions have
been applied that are consistent to a Paris-aligned 1.5(O)C 2050 net zero
pathway. The Group has a clearly articulated NZAP Plus plan to lead in the
UK's transition to clean power and aligns its investment plans and business
activities to that strategy. These plans are supported by the Group's Green
Bond framework under which the Group's eighth green bond was issued by SSEN
Transmission in August 2024 and ninth green bond was issued by SSE plc in
March 2025 (see note 13). The proceeds of the eighth green bond were allocated
to fund Transmission network projects and the proceeds of the ninth green bond
were allocated to finance or refinance Renewables wind farm projects.
The impact of future climate change regulation could have a material impact on
the currently reported amounts of the Group's assets and liabilities. In
preparing these Summary Financial Statements, the following climate change
related risks have been considered:
5. Accounting judgements and estimation uncertainty
(continued)
5.1 Significant financial judgements and estimation uncertainties
(continued)
v) Impact of climate change and the transition to net zero -
financial judgement and estimation uncertainty (continued)
Valuation of property, plant and equipment, and impairment assessment of
goodwill
The Group's view is that flexible generation capacity, such as the Group's
fleet of CCGT power stations, will be an essential part of the net zero
transition to provide security of supply to a market increasingly dependent
upon renewable sources, which are inherently intermittent. The UK Government
recently published its "Clean Power 2030 Action Plan" which supports the
Group's view that unabated gas will continue to play a back-up role throughout
the transition to clean power, by ensuring the security of supply. The Group
assesses the useful economic life of its assets on an annual basis. The
assessment performed at 31 March 2025 indicated that certain unabated CCGT
assets at Peterhead, Keadby and Medway should have their useful economic life
extended from 2030 to 2035 due to the combination of UK Government policy
reiterating the importance of flexible generation from gas fired CCGTs in the
transition to clean power; the Group's ongoing success in capacity market
auctions; and the technical capability of these assets to operate to that
date. The change in end of life assumption for these assets has been reflected
in the annual impairment process. As a result, all the Group's unabated CCGT
assets held at 31 March 2025 are forecast to operate beyond 2030. The process
to determine the Group's material climate-related opportunities and risks in
the period to 31 March 2025 reduced the perceived risk of mandated early
closure for these assets. As a result, the "Accelerated gas closure"
transition risk is no longer a material transition risk reported in the
Group's TCFD disclosures.
A significant increase in renewable generation capacity in the Group's core
markets in the UK and Ireland could potentially result in an oversupply of
renewable electricity at a point in the future, which would lead to a
consequential decrease in the power price achievable for the Group's wind
generation assets. The Group has not assessed that this constitutes an
indicator of impairment at 31 March 2025 as the Group's baseline investment
case models assume a centrally approved volume of new build in these markets
over the life of the existing assets. The Group's policy is to test the
goodwill balances associated with its wind generation portfolio for impairment
on an annual basis in line with the requirements of IAS 36 "Impairment of
Assets". Through this impairment assessment, a sensitivity to power price,
which may arise in a market with significant new build, was modelled. This
scenario indicated that, despite a modelled 10% reduction in power price,
there remained significant headroom on the carrying value in the Group's
generating wind assets.
Changes to weather patterns resulting from global warming have also been
considered as a potential risk to future returns from the Group's wind and
hydro assets. Changes to weather patterns could result in calmer, drier
weather patterns, which would reduce volumes achievable for the Group's wind
and hydro generation assets (although noting that this would likely lead to
capacity constraints and hence higher prices). This has not been assessed as
an indicator of impairment for operating assets in the UK and Ireland at 31
March 2025, as there is no currently observable evidence to support that
scenario directly. The Group has performed a sensitivity to its impairment
modelling and has assessed that a 10% reduction in achievable volume would
result in significant headroom on the carrying value of the UK and Ireland
assets at 31 March 2025.
Valuation of decommissioning provisions
The Group holds decommissioning provisions for its Renewable and Thermal
generation assets and has retained a 60% share for the decommissioning of its
disposed Gas Production business. As noted above, the Group has extended the
useful economic life of three of its unabated CCGT assets at 31 March 2025,
which are now expected to operate to 2035 and delay the decommissioning of
these assets. While the Group has modelled scenarios that that estimate the
impact of the closure date being brought forward by legislation, the Group
assessed that the perceived risk of legislation being enacted by 2030 to
mandate the closure of unabated assets has decreased. Similarly, it is
expected that fundamental changes to weather patterns, or the impact of new
wind generation capacity, will not bring forward the decommissioning of the
Group's wind farm portfolio.
The discounted share of the Gas Production provision is £201.6m (2024:
£219.7m). At 31 March 2025, the impact of discounting of this retained
provision is £80.8m (2024: £68.3m), which is expected to be incurred across
the period to 31 March 2040. If the decommissioning activity was accelerated
due to changes in legislation, the costs of unwinding the discounting of the
provision would be recognised earlier.
Defined benefit scheme assets
The Group holds defined benefit pension scheme assets at 31 March 2025 which
could be impacted by climate-related risks. The trustees of the schemes have a
long term investment strategy that seeks to reduce investment risk as and when
appropriate and takes into consideration the impact of climate-related risk.
Going concern and viability statement
The implications of near-term climate-related risks have been considered in
the Group's going concern assessment and viability statement assessment.
5.2 Accounting judgements and estimation uncertainties - changes
from prior year
As disclosed in note 2.4 above, the Group's Thermal business unit reviewed the
useful economic life of the Peterhead, Keadby and Medway CCGT assets at 31
March 2025 and extended their useful lives to 2035. The change in useful
economic life has been applied prospectively and had no impact on the results
for the year ended 31 March 2025. The depreciation charge for the year ending
31 March 2026 will be reduced by £14.2m.
As there is no provision for uncertain tax positions within the financial
statements in the current or comparative years (2024 and 2023: £nil) and
noting the Group's current view on such matters, this estimation uncertainty
has been removed from the disclosure of estimates that could result in a
significant impact on the financial statements.
There were no other changes to accounting judgements and estimation
uncertainties during the year.
5. Accounting judgements and estimation uncertainty
(continued)
5.3 Other areas of estimation uncertainty
Decommissioning costs
The calculation of the Group's decommissioning provisions involves the
estimation of quantum and timing of cash flows to settle the obligation. The
Group engages independent valuation experts to estimate the cost of
decommissioning its Renewable, Thermal and Gas Storage assets every three
years based on current technology and prices. The last independent assessment
for the majority of the Group's Renewable and Thermal generation assets was
performed in the current year to 31 March 2025. The last formal assessment for
Gas Storage assets was performed in the year to 31 March 2023. Retained
decommissioning costs in relation to the disposed Gas Production business are
periodically agreed with the field operators and reflect the latest expected
economic production lives of the fields.
The dates for settlement of future decommissioning costs are uncertain,
particularly for the disposed Gas Production business where reassessment of
gas and liquids reserves and fluctuations in commodity prices can lengthen or
shorten the field life.
Further detail on the assumptions applied, including expected decommissioning
dates, and movement in decommissioning costs during the year are disclosed at
note 20 in the Group's consolidated financial statements.
6. Segmental information
IFRS 8 requires operating segments to be identified based on the Group's
internal reporting to its Chief Operating Decision Maker to assess operating
performance and to make decisions on how to allocate capital. The Group's
Chief Operating Decision Maker has been identified as the Group Executive
Committee. The changes to the Group's segments in the year are explained in
note 2.3.1 and are due to the integration of the activities of SSE Enterprise
into SSE's other segments. Comparative information has been re-presented to
reflect the change to these segments. The Group's "Corporate unallocated"
segment is the Group's residual corporate central costs which are not
allocated to individual segments and includes the contribution from its
Enerveo business and the Group's joint venture investment in Neos Networks
Limited.
The types of products and services from which each reportable segment derives
its revenues are:
Business Area Reported Segments Description
Continuing operations
Transmission SSEN Transmission The economically regulated high voltage transmission of electricity from
generating plant to the distribution network in the North of Scotland.
Revenue earned from constructing, maintaining and renovating the transmission
network is determined in accordance with the regulatory licence, based on an
Ofgem approved revenue model and is recognised as charged to National Grid.
The revenue earned from other transmission services such as generator plant
connections is recognised in line with delivery of that service over the
expected contractual period and at the contracted rate. On 25 November 2022
the Group sold a 25.0% non-controlling interest in this business to the
Ontario Teachers' Pension Plan.
Distribution SSEN Distribution The economically regulated lower voltage distribution of electricity to
customer premises in the North of Scotland and the South of England. Revenue
earned from delivery of electricity supply to customers is recognised based on
the volume of electricity distributed to those customers and the set customer
tariff. The revenue earned from other distribution services such as domestic
customer connections is recognised in line with delivery of that service over
the expected contractual period and at the contracted rate.
Renewables SSE Renewables The generation of electricity from renewable sources, such as onshore and
offshore wind farms and run of river and pumped storage hydro assets primarily
in the UK and Ireland. This segment also includes the development of wind
assets in Japan and The Netherlands; solar assets in Poland; and the
development of wind, solar and battery opportunities in the UK and Southern
Europe. Revenue from physical generation of electricity in Great Britain is
sold to SSE Energy Markets and in Ireland is sold to SSE Airtricity and is
recognised as generated, based on the contracted or spot price at the time of
delivery. Revenue from national support schemes (such as Renewable Obligation
Certificates or the Capacity Market in Great Britain or REFIT in Ireland) may
either be recognised in line with electricity being physically generated or
over the contractual period, depending on the underlying performance
obligation.
6. Segmental information (continued)
Business Area Reported Segments Description
Thermal SSE Thermal The generation of electricity from thermal plants including CCGTs in the UK
and Ireland and the Group's interests in multifuel assets in the UK. Revenue
from physical generation of electricity in Great Britain and Ireland is sold
to SSE Energy Markets and is recognised as generated, based on the contract or
spot price at the time of delivery. Revenue from national support schemes
(such as the Capacity Market) and ancillary generation services may either be
recognised in line with electricity being physically generated or over the
contractual period, depending on the underlying performance obligation.
Following the change in segmental reporting noted at note 2.3.1, SSE Thermal
also includes the Slough Heat and Power assets which were previously reported
within SSE Enterprise.
Gas Storage The operation of gas storage facilities in Great Britain, utilising capacity
to optimise trading opportunity associated with the assets. Contribution
arising from trading activities is recognised as realised based on the
executed trades or withdrawal of gas from caverns.
Energy Customer Solutions SSE Business Energy The supply of electricity and gas to business customers in Great Britain and
smart buildings activity. Revenue earned from the supply of energy is
recognised in line with the volume delivered to the customer, based on actual
and estimated volumes, and reflecting the applicable customer tariff after
deductions or discounts.
Following the change in segmental reporting noted at note 2.3.1, SSE Business
Energy activities also include the provision of low carbon energy solutions to
customers; behind-the-meter solar and battery solutions; equity investment in
the Source EV joint venture; private electric networks and heat and cooling
network activities which were previously reported within SSE Enterprise.
SSE Airtricity The supply of electricity, gas and energy related services to residential and
business customers in the Republic of Ireland and Northern Ireland. Revenue
earned from the supply of energy is recognised in line with the volume
delivered to the customer, based on actual and estimated volumes, and
reflecting the applicable customer tariff after deductions or discounts.
Revenue earned from energy related services may either be recognised over the
expected contractual period or following performance of the service, depending
on the underlying performance obligation.
SSE Energy Markets SSE Energy Markets The provision of a route to market for the Group's Renewable and Thermal
generation businesses and commodity procurement for the Group's energy supply
businesses in line with the Group's stated hedging policies. Revenue from
physical sales of electricity, gas and other commodities produced by SSE is
recognised as supplied to either the national settlements body or the
customer, based on either the spot price at the time of delivery or trade
price where that trade is eligible for "own use" designation. The sale of
commodity optimisation trades is presented net in cost of sales alongside
purchase commodity optimisation trades.
Following the change in segmental reporting noted at note 2.3.1, SSE Energy
Markets also includes the Enhance route-to-market platform which was
previously reported within SSE Enterprise.
The internal measure of profit reported to the Board is "adjusted profit
before interest and tax" or "adjusted operating profit" which is arrived at
before exceptional items, the impact of financial instruments measured under
IFRS 9, share of profits attributable to non-controlling interests,
adjustments to the Gas Production decommissioning provision, the impact of
depreciation on fair value uplifts and after the removal of taxation and
interest on profits from joint ventures and associates.
Analysis of revenue, operating profit, capital expenditure and earnings before
interest, taxation, depreciation and amortisation ("EBITDA") by segment is
provided on the following pages. Revenue and profit before taxation arise
primarily from operations within the UK and Ireland.
6. Segmental information (continued)
6.1 Revenue by segment
Reported revenue Inter-segment revenue (i) Segment revenue Reported revenue Inter- Segment revenue
segment revenue (i)
2025 2025 2025 2024 (restated*) 2024 (restated*) 2024 (restated*)
£m £m £m £m £m £m
Continuing operations
SSEN Transmission 807.0 - 807.0 885.2 - 885.2
SSEN Distribution 1,513.6 66.9 1,580.5 1,004.0 45.9 1,049.9
SSE Renewables 354.9 1,243.8 1,598.7 335.5 876.3 1,211.8
Thermal
SSE Thermal 633.0 1,251.3 1,884.3 599.4 3,143.0 3,742.4
Gas storage 17.6 3,305.4 3,323.0 11.2 2,948.4 2,959.6
Energy Customer Solutions
SSE Business Energy 2,692.4 76.3 2,768.7 3,246.7 53.0 3,299.7
SSE Airtricity 1,909.1 163.0 2,072.1 2,021.2 170.0 2,191.2
SSE Energy Markets:
Gross trading 16,542.4 6,074.6 22,617.0 15,074.3 7,951.4 23,025.7
Optimisation trades (14,547.0) 36.8 (14,510.2) (12,785.1) (2,674.2) (15,459.3)
SSE Energy Markets 1,995.4 6,111.4 8,106.8 2,289.2 5,277.2 7,566.4
Corporate unallocated 208.9 294.5 503.4 64.8 250.9 315.7
Total SSE Group 10,131.9 12,512.6 22,644.5 10,457.2 12,764.7 23,221.9
*The comparative segment revenue has been restated. See note 2.3.1.
(i) Significant inter-segment revenue is derived from the sale of power
and stored gas from SSE Renewables, SSE Thermal and Gas Storage to SSE Energy
Markets; use of system income received by SSEN Distribution from SSE Business
Energy; SSE Business Energy provides internal heat and light power supplies to
other Group companies; SSE Energy Markets provides power, gas and other
commodities to SSE Business Energy and SSE Airtricity; and Corporate
unallocated provides corporate and infrastructure services to all segments as
well as third parties. All are provided at arm's length.
Revenue by geographical location on continuing operations is as follows:
2025 2024
£m £m
UK 8,490.3 8,797.6
Ireland 1,641.6 1,659.6
10,131.9 10,457.2
6. Segmental information (continued)
6.2 Operating profit/(loss) by segment
2025
Adjusted operating profit reported to the Board Depreciation on fair value uplifts Joint Venture/ Associate share of interest and tax Adjustments to Gas Production decommissioning provision Non-controlling interests Before exceptional items and certain re-measurements Exceptional items and certain re-measurements
Total
£m £m £m £m £m £m £m £m
Continuing operations
SSEN Transmission 322.5 - - - 107.5 430.0 - 430.0
SSEN Distribution 736.0 - - - - 736.0 - 736.0
SSE Renewables 1,038.8 (19.7) (155.3) - (0.8) 863.0 (245.4) 617.6
Thermal
SSE Thermal 248.5 (0.4) (6.0) - - 242.1 (1.3) 240.8
Gas Storage (37.1) - - - - (37.1) (8.4) (45.5)
Energy Customer Solutions
SSE Business Energy 32.7 - (0.5) - - 32.2 - 32.2
SSE Airtricity 159.4 - (0.4) - - 159.0 (2.0) 157.0
SSE Energy Markets 30.0 - - - - 30.0 (72.9) (42.9)
Corporate
Corporate unallocated (89.4) - - 17.9 - (71.5) (58.2) (129.7)
Neos Networks (22.2) - (11.1) - - (33.3) - (33.3)
Total SSE Group 2,419.2 (20.1) (173.3) 17.9 106.7 2,350.4 (388.2) 1,962.2
2024 (restated*)
Adjusted operating profit reported to the Board Depreciation on fair value uplifts Joint Venture/ Associate share of interest and tax Adjustments to Gas Production decommissioning provision Non-controlling interests Before exceptional items and certain re-measurements Exceptional items and certain re-measurements
Total
£m £m £m £m £m £m £m £m
Continuing operations
SSEN Transmission 419.3 - - - 139.8 559.1 - 559.1
SSEN Distribution 272.1 - - - - 272.1 - 272.1
SSE Renewables 833.1 (19.0) (145.7) - (0.7) 667.7 (37.4) 630.3
Thermal
SSE Thermal 752.5 - (13.1) - - 739.4 (78.6) 660.8
Gas Storage 82.8 - - - - 82.8 (125.0) (42.2)
Energy Customer Solutions
SSE Business Energy 55.2 - - - - 55.2 - 55.2
SSE Airtricity 95.0 - (0.5) - - 94.5 - 94.5
SSE Energy Markets 37.5 - - - - 37.5 551.1 588.6
Corporate
Corporate unallocated (88.8) - - (9.9) - (98.7) 4.6 (94.1)
Neos Networks (32.3) - (10.2) - - (42.5) (73.6) (116.1)
Total SSE Group 2,426.4 (19.0) (169.5) (9.9) 139.1 2,367.1 241.1 2,608.2
*The comparative operating profit/(loss) by segment information has been
restated. See note 2.3.1.
6. Segmental information (continued)
6.3 Earnings before interest, taxation, depreciation and
amortisation ('EBITDA')
2025
Adjusted operating profit reported to the Board Depreciation/ impairment/ Joint Venture / Associate share of depreciation and amortisation Release of deferred income Share of non-controlling interest depreciation and amortisation Adjusted EBITDA
amortisation before exceptional charges
(note 6.2) Depreciation on fair value uplifts
£m £m £m £m £m £m £m
Continuing operations
SSEN Transmission 322.5 - 151.1 - (2.3) (37.8) 433.5
SSEN Distribution 736.0 - 214.2 - (10.8) - 939.4
SSE Renewables 1,038.8 (19.7) 202.7 132.5 - - 1,354.3
Thermal
SSE Thermal 248.5 (0.4) 89.6 42.9 - - 380.6
Gas Storage (37.1) - 0.8 - - - (36.3)
Energy Customer Solutions
SSE Business Energy 32.7 - 24.7 1.3 (0.5) - 58.2
SSE Airtricity 159.4 - 7.5 - - - 166.9
SSE Energy Markets 30.0 - 6.8 - - - 36.8
Corporate
Corporate unallocated (89.4) - 78.7 - (0.5) - (11.2)
Neos Networks (22.2) - - 49.3 - - 27.1
Total SSE Group 2,419.2 (20.1) 776.1 226.0 (14.1) (37.8) 3,349.3
Note that the Group's "Net Debt to EBITDA" metric is derived after removing
the proportionate EBITDA from the following debt-financed Beatrice, Seagreen
and Dogger Bank A joint ventures. This adjustment is £153.3m (2024: £179.6m)
resulting in EBITDA on continuing operations for inclusion in the Debt to
EBITDA metric of £3,196.0m (2024: £3,116.0m).
For 31 March 2025 the £776.1m (2024: £724.9m) combined depreciation,
impairment and amortisation charges included non-exceptional impairments net
of reversals totalling £20.7m (2024: £33.0m).
2024 (restated*)
Adjusted operating profit reported to the Board Depreciation/ impairment/ Joint Venture / Associate share of depreciation and amortisation Release of deferred income Share of non-controlling interest depreciation and amortisation Adjusted EBITDA
amortisation before exceptional charges
(note 6.2) Depreciation on fair value uplifts
£m £m £m £m £m £m £m
Continuing operations
SSEN Transmission 419.3 - 130.1 - (2.0) (32.5) 514.9
SSEN Distribution 272.1 - 194.8 - (9.9) - 457.0
SSE Renewables 833.1 (19.0) 171.9 121.6 - - 1,107.6
Thermal
SSE Thermal 752.5 - 109.6 40.6 - - 902.7
Gas Storage 82.8 - 12.4 - - - 95.2
Energy Customer Solutions
SSE Business Energy 55.2 - 13.7 - (0.5) - 68.4
SSE Airtricity 95.0 - 5.1 - - - 100.1
SSE Energy Markets 37.5 - 5.1 - - - 42.6
Corporate
Corporate unallocated (88.8) - 82.2 - (0.6) - (7.2)
Neos Networks (32.3) - - 46.6 - - 14.3
Total SSE Group 2,426.4 (19.0) 724.9 208.8 (13.0) (32.5) 3,295.6
*The comparative adjusted EBITDA by segment information has been restated. See
note 2.3.1.
6. Segmental information (continued)
6.4 Capital and investment expenditure by segment
Capital additions to intangible assets Capital additions to property, plant and equipment Capital additions to intangible assets Capital additions to property, plant and equipment
2025 2025 2024 2024
£m £m £m £m
Continuing operations (restated*) (restated*)
SSEN Transmission 20.3 1,253.8 12.8 784.7
SSEN Distribution 35.8 743.9 20.3 636.8
SSE Renewables 291.3 545.8 355.1 433.8
Thermal
SSE Thermal 56.9 138.6 83.5 34.6
Gas Storage - 0.7 - 0.8
Energy Customer Solutions
SSE Business Energy 28.9 33.5 69.4 22.4
SSE Airtricity 7.1 - 14.1 0.7
SSE Energy Markets 585.1 - 723.9 -
Corporate unallocated 20.1 75.2 35.1 57.6
Total SSE Group 1,045.5 2,791.5 1,314.2 1,971.4
Increase in prepayments related to capital expenditure - 254.9 - 215.1
Tarbert temporary generation additions - 55.7 - 93.4
(Increase)/decrease in trade payables related to capital expenditure - (122.8) 2.5 (84.6)
Customer or third party funded additions - (163.4) - (152.0)
Lease asset additions - (126.7) - (73.0)
Less non-cash items:
Allowances and certificates (335.7) - (346.6) -
Net cash outflow 709.8 2,689.2 970.1 1,970.3
*The comparatives have been restated. See note 2.3.1.
Capital additions do not include assets acquired in acquisitions, assets
acquired under leases or assets constructed that the Group were reimbursed by
way of a government grant. During the prior year construction commenced on a
temporary generation plant at the Group's Tarbert site for which the Group
received reimbursements totalling £55.7m (2024: £93.4m) from government
bodies (presented separately on the cash flow statement). Capital additions to
intangible assets includes the cash purchase of emissions allowances and
certificates (2025: £268.0m; 2024: £427.9m). These purchases are presented
in the cash flow statement within operating activities as they relate to the
obligation to surrender the allowances and certificates in line with operating
volumes of emissions. Other non-cash additions comprise self-generated
renewable obligation certificates.
6. Segmental information (continued)
6.4 Capital and investment expenditure by segment (continued)
2025
Capital additions to intangible assets Capital additions to property, plant and equipment Capital Investment relating to Joint Ventures and Associates (i) Allowances and certificates Customer funded additions Lease asset additions (iv) Share of non-controlling interests Adjusted
£m £m £m (ii) (iii) £m (v) Investment and Capital Expenditure
£m £m £m £m
Continuing operations
SSEN Transmission 20.3 1,253.8 - - - (2.8) (317.8) 953.5
SSEN Distribution 35.8 743.9 - - (143.3) (0.6) - 635.8
SSE Renewables 291.3 545.8 227.8 - - (60.1) (3.0) 1,001.8
Thermal
SSE Thermal 56.9 138.6 31.3 (27.3) (16.2) (0.2) - 183.1
Gas Storage - 0.7 - - - - - 0.7
Energy Customer Solutions
SSE Business Energy 28.9 33.5 15.1 - (3.9) (0.5) - 73.1
SSE Airtricity 7.1 - - - - (0.2) - 6.9
SSE Energy Markets 585.1 - - (576.4) - - - 8.7
Corporate unallocated 20.1 75.2 13.8 - - (62.3) - 46.8
Total SSE Group 1,045.5 2,791.5 288.0 (603.7) (163.4) (126.7) (320.8) 2,910.4
(i) Represents equity or debt funding provided to joint ventures or
associates in relation to capital expenditure projects.
(ii) Allowances and certificates consist of purchased carbon emissions
allowances and generated or purchased renewable obligations certificates and
are not included in the Group's Capital Expenditure and Investment alternative
performance measure.
(iii) Represents removal of additions to electricity and other networks
funded by customer or third party contributions.
(iv) Represents removal of additions in respect of right of use assets
recognised on the commencement date of a lease arrangement.
(v) Represents the share of capital additions attributable to
non-controlling interests.
6. Segmental information (continued)
6.4 Capital and investment expenditure by segment (continued)
2024 (restated*)
Capital additions to intangible assets Capital additions to property, plant and equipment Capital Investment relating to Joint Ventures and Associates (i) Allowances and certificates Customer funded additions Lease asset additions (iv) Share of non-controlling interests Adjusted
£m £m £m (ii) (iii) £m (v) Investment and Capital Expenditure
£m £m £m £m
Continuing operations
SSEN Transmission 12.8 784.7 - - - (2.5) (199.4) 595.6
SSEN Distribution 20.3 636.8 - - (152.0) - - 505.1
SSE Renewables 355.1 433.8 324.5 - - (16.3) - 1,097.1
Thermal
SSE Thermal 83.5 34.6 51.4 (59.7) - (0.6) - 109.2
Gas Storage - 0.8 - - - - - 0.8
Energy Customer Solutions
SSE Business Energy 69.4 22.4 - - - (7.2) - 84.6
SSE Airtricity 14.1 0.7 - - - - - 14.8
SSE Energy Markets 723.9 - - (714.8) - - - 9.1
Corporate unallocated 35.1 57.6 14.1 - - (46.4) - 60.4
Total SSE Group 1,314.2 1,971.4 390.0 (774.5) (152.0) (73.0) (199.4) 2,476.7
*The comparatives have been restated. See note 2.3.1.
(i) Represents equity or debt funding provided to joint ventures or
associates in relation to capital expenditure projects.
(ii) Allowances and certificates consist of purchased carbon emissions
allowances and generated or purchased renewable obligations certificates and
are not included in the Group's Capital Expenditure and Investment alternative
performance measure.
(iii) Represents removal of additions to electricity and other networks
funded by customer or third party contributions.
(iv) Represents removal of right of use assets recognised on the
commencement date of a lease arrangement.
(v) Represents the share of capital additions attributable to
non-controlling interests.
7. Exceptional items and certain re-measurements
2025 2024
£m £m
Continuing operations
Exceptional items
Asset impairments and related charges (293.6) (270.9)
Provisions for restructuring and other liabilities (16.1) -
Net gains on acquisitions/disposals of businesses and other assets 0.3 4.9
Total exceptional items (309.4) (266.0)
Certain re-measurements
Movement on operating derivatives (note 16) (49.0) 452.2
Movement in fair value of commodity stocks (8.4) 9.1
Movement on financing derivatives (note 16) 12.8 6.1
Share of movement on derivatives in jointly controlled entities (net of tax) (21.1) 46.1
Total certain re-measurements (65.7) 513.5
Exceptional items and certain re-measurements on continuing operations before (375.1) 247.5
taxation
Taxation
Taxation on other exceptional items 29.7 23.3
Taxation on certain re-measurements 4.0 (115.0)
Total taxation 33.7 (91.7)
Total exceptional items and certain re-measurements on continuing operations (341.4) 155.8
after taxation
Exceptional items and certain re-measurements are disclosed across the
following categories within the income statement:
2025 2024
£m £m
Continuing operations
Cost of sales:
Movement on operating derivatives (note 16) (49.0) 452.2
Movement in fair value of commodity stocks (8.4) 9.1
(57.4) 461.3
Operating costs:
Asset impairments and reversals (293.6) (270.9)
Exceptional restructuring provisions and charges (16.1) -
(309.7) (270.9)
Operating income:
Net gains on acquisition/disposals of businesses and other assets - 4.6
- 4.6
Joint ventures and associates:
Share of movement on derivatives in jointly controlled entities (net of tax) (21.1) 46.1
(21.1) 46.1
Operating (loss)/profit (388.2) 241.1
Finance income
Movement on financing derivatives (note 16) 12.8 6.1
Interest income on deferred consideration receipt 0.3 0.3
13.1 6.4
Profit before tax on continuing operations (375.1) 247.5
7.1 Exceptional items
7.1.1 Exceptional items in the year ended 31 March 2025
In the year to 31 March 2025, the Group recognised a net pre-tax exceptional
charge of £309.4m (2024: £266.0m), which is primarily due to an exceptional
pre-tax impairment charge of £249.5m relating to goodwill and intangible
assets in the Group's Southern Europe Renewables development platform,
exceptional Group restructuring costs of £46.7m, exceptional costs related to
Enerveo Limited of £13.5m and a final exceptional credit of £0.3m relating
to the part disposal of Slough Multifuel in the year ended 31 March 2021.
7. Exceptional items and certain re-measurements (continued)
7.1 Exceptional items (continued)
7.1.1 Exceptional items in the year ended 31 March 2025 (continued)
The net exceptional (charges)/credits recognised can be summarised as follows:
Intangible assets- goodwill Intangible assets Property, plant and equipment Provisions Other assets/ Net (charges) and credits
£m £m £m £m (liabilities) £m
£m
Southern Europe impairment (i) (174.7) (74.8) - - - (249.5)
Restructuring costs (ii) (20.5) (3.8) (7.2) (6.5) (8.7) (46.7)
Enerveo (iii) - - - - (13.5) (13.5)
Other credits (iv) - - - - 0.3 0.3
Total exceptional items (195.2) (78.6) (7.2) (6.5) (21.9) (309.4)
i) Southern Europe goodwill and development assets - impairment charge
The Group has recognised a pre-tax impairment charge of £249.5m against the
carrying value of its Southern Europe goodwill and intangible assets, offset
by the release of a deferred tax liability of £23.2m.
ii) Restructuring costs
In the second half of the financial year the Group announced a Group Operating
Model and Efficiency Review, which is expected to conclude in the first half
of the 2026 financial year. During the current year, costs totalling £46.7m
have been recognised, including the impairment of £19.8m of goodwill
recognised on acquisition of The Energy Solutions Group Limited, the
impairment of £11.1m of stranded IT assets and £13.8m of redundancy costs.
iii) Enerveo
On 3 October 2024, SSE entered into an agreement with HUK 144 Limited to
dispose of the Infrastructure Solutions ("IS") component of Enerveo for
consideration of £1 less costs. At 30 September 2024, the Group assessed that
the business met the criteria to be classified as held for sale. During the
second half of the financial year, the transaction to dispose of the business
failed to complete, resulting in the business no longer being classified as
held for sale at 31 March 2025. The Group has recognised an exceptional
charge of £13.5m, comprising an impairment of £12.5m to write-down the value
of the assets to their recoverable value, and costs of £1.0m related to the
transaction with HUK 144 Limited. The current year charges have been treated
as exceptional to align the treatment with previously recognised exceptional
charges associated with the Enerveo business.
iv) Other credits
At 31 March 2025, the Group recognised a final exceptional credit of £0.3m
(2024: £0.3m) relating to the unwind of discounting on deferred consideration
recognised on the part disposal of SSE Slough Multifuel Limited in the year
ending 31 March 2021. The deferred consideration of £7.0m was paid on
commissioning of the plant.
7.1.2 Exceptional items in the year ended 31 March 2024
In the year to 31 March 2024, the Group recognised a net exceptional charge of
£266.0m, which was primarily due to an exceptional impairment charge related
to the Group's gas storage assets of £134.1m, an exceptional impairment of
£63.2m against the carrying value of the Group's investment in Triton Power
Holdings Limited and an exceptional impairment charge of £73.6m against the
Group's investment in Neos Networks.
i) Triton Power 50% joint venture - investment impairment charge
At 31 March 2024 the Group recognised an impairment charge of £63.2m against
the carrying value of the Group's investment in Triton Power Holdings Limited,
reflecting future market price assumptions.
ii) Gas Storage - impairment charge
The Group performed a formal impairment review at 31 March 2024 to reassess
the carrying value of its Gas Storage operations at Aldbrough and Atwick. As a
result of the assessment, the Group recognised an exceptional impairment
charge of £85.7m to the carrying value of the assets at Aldbrough and £48.4m
to the carrying value of the assets at Atwick.
iii) Neos Networks 50% joint venture - investment impairment charge
At 31 March 2024, the Group performed a formal impairment assessment on the
carrying value of its 50% joint venture investment, including shareholder loan
balances, in Neos Networks Limited. The assessment indicated that the
recoverable amount of the investment and shareholder loan receivable balances
were impaired by £73.6m.
iv) Enerveo acquisition
On 22 March 2024, the Group purchased the entire share capital of Enerveo from
Aurelius Antelope Limited ("Aurelius") for cash consideration of £1.0m.
Completion of the transaction resulted in an exceptional credit of £4.6m
being recognised on acquisition during the year ended 31 March 2024.
7. Exceptional items and certain re-measurements (continued)
7.1 Exceptional items (continued)
7.1.3 Taxation
The Group has separately recognised the tax effect of the exceptional items
summarised above.
7.2 Certain re-measurements
The Group, through its SSE Energy Markets business, enters into forward
commodity purchase (and sales) contracts to meet the future demand
requirements of its SSE Business Energy and SSE Airtricity supply businesses,
to optimise the value of its SSE Renewables and SSE Thermal power generation
assets or to conduct other trading subject to the value at risk limits set out
by the Energy Markets Risk Committee. Certain of these contracts
(predominantly electricity, gas and other commodity purchase contracts) are
determined to be derivative financial instruments under IFRS 9 "Financial
Instruments" and as such are required to be recorded at their fair value.
Conversely, commodity contracts that are not financial instruments under IFRS
9 (predominantly electricity sales contracts) are accounted for as "own use"
contracts and are not recorded at their fair value. Inventory purchased to
utilise excess capacity ahead of an optimised sale in the market by the Gas
Storage business is held as trading inventory at fair value with changes in
value recognised within "certain re-measurements". In addition, the
mark-to-market valuation movements on the Group's contracts for difference
contracts entered into by SSE Renewables that are not designated as government
grants, and which are measured as Level 3 fair value financial instruments,
are also included within "certain re-measurements".
Changes in the fair value of those commodity contracts designated as financial
instruments and trading inventory are therefore reflected in the income
statement. The Group shows the change in the fair value of these forward
contracts and trading inventory separately as "certain re-measurements", as
the Group does not believe this mark-to-market movement is relevant to the
underlying performance of its businesses.
At 31 March 2025, changes in global commodity markets and in SSE's contractual
positions have resulted in a net mark-to-market re-measurement on commodity
contracts designated as financial instruments, contracts for difference
contracts and trading inventory of £57.4m (loss) (2024: £461.3m (gain)). The
net IFRS 9 position on operating derivatives at 31 March 2025 is a liability
of £3.9m (2024: £51.4m asset).
The mark-to-market loss in the year has resulted in a deferred tax credit of
£9.3m (2024: £115.0m charge), which has been reported separately as part of
certain re-measurements. In addition, the Group has recognised gains of
£12.8m (2024: £6.1m gain) on the re-measurement of certain interest rate and
foreign exchange contracts through the income statement, gains on the
re-measurement of cash flow hedge accounted contracts of £48.1m (2024: £6.5m
gain) in other comprehensive income and a loss on the equity share of the
re-measurement of cash flow hedge accounted contracts in joint ventures of
£16.7m (2024: £40.9m loss).
The re-measurements arising from IFRS 9 and the associated deferred tax are
disclosed separately to aid understanding of the underlying performance of the
Group.
8. Finance income and costs
2025 2024
Before exceptional items and certain re-measurements Exceptional items and certain re-measurements Total Before exceptional items and certain re-measurements Exceptional items and certain re-measurements Total
£m £m £m £m £m £m
Finance income:
Interest income from short term deposits 24.8 - 24.8 60.3 - 60.3
Interest on pension scheme assets (i) 20.7 - 20.7 26.2 - 26.2
Other interest receivable:
Joint ventures and associates 118.8 - 118.8 78.4 - 78.4
Other receivable 30.5 0.3 30.8 33.9 0.3 34.2
149.3 0.3 149.6 112.3 0.3 112.6
Total finance income 194.8 0.3 195.1 198.8 0.3 199.1
Finance costs:
Bank loans and overdrafts (61.1) - (61.1) (77.4) - (77.4)
Other loans and charges (309.9) - (309.9) (274.3) - (274.3)
Notional interest arising on discounted provisions (27.2) - (27.2) (25.2) - (25.2)
Foreign exchange translation of monetary assets and liabilities (0.2) - (0.2) - - -
Lease charges (26.9) - (26.9) (25.8) - (25.8)
Less: interest capitalised (ii) 106.1 - 106.1 84.4 - 84.4
Total finance costs (319.2) - (319.2) (318.3) - (318.3)
Changes in fair value of financing derivative assets or liabilities at fair - 12.8 12.8 - 6.1 6.1
value through profit or loss
Net finance costs (124.4) 13.1 (111.3) (119.5) 6.4 (113.1)
Presented as:
Finance income 194.8 13.1 207.9 198.8 6.4 205.2
Finance costs (319.2) - (319.2) (318.3) - (318.3)
Net finance costs (124.4) 13.1 (111.3) (119.5) 6.4 (113.1)
(i) The interest income on net pension assets for the year ended 31
March 2025 of £20.7m (2024: £26.2m) represents the interest earned under IAS
19.
(ii) The capitalisation rate applied in determining the amount of
borrowing costs to capitalise in the year was 4.12% (2024: 4.20%).
Adjusted net finance costs are arrived at after the following adjustments:
2025 2024
£m £m
(restated*)
Net finance costs (111.3) (113.1)
(add)/less:
Share of interest from joint ventures and associates (164.3) (110.7)
Movement on financing derivatives (note 16) (12.8) (6.1)
Exceptional item (0.3) (0.3)
Share of net finance cost attributable to non-controlling interests 7.7 4.7
Adjusted net finance costs (281.0) (225.5)
Notional interest arising on discounted provisions 27.2 25.2
Lease charges 26.9 25.8
Hybrid coupon payment (note 14) (73.7) (73.1)
Adjusted net finance costs for interest cover calculations (300.6) (247.6)
*The comparatives have been restated to take account of the removal of the
adjustment to exclude net pension scheme interest costs from the Group's APM.
See note 2.3.2 for more detail.
9. Taxation
Analysis of charge recognised in the income statement
2025 2024
Before exceptional items and certain re-measure-ments Exceptional items and certain re-measure-ments Total Before exceptional items and certain re-measure-ments Exceptional items and certain re-measure-ments Total
£m £m £m £m £m £m
Current tax
Corporation tax 247.3 (5.3) 242.0 366.1 (36.5) 329.6
Adjustments in respect of previous years (8.3) - (8.3) (25.6) 31.8 6.2
Total current tax 239.0 (5.3) 233.7 340.5 (4.7) 335.8
Deferred tax
Current year 293.6 (28.4) 265.2 155.3 128.2 283.5
Adjustments in respect of previous years 19.1 - 19.1 23.2 (31.8) (8.6)
Total deferred tax 312.7 (28.4) 284.3 178.5 96.4 274.9
Total taxation charge/(credit) 551.7 (33.7) 518.0 519.0 91.7 610.7
Adjusted current tax charge
The "adjusted current tax charge" and the "adjusted effective rate of tax",
which are presented in order to best represent underlying performance by
making similar adjustments to the "adjusted profit before tax" measure, are
arrived at after the following adjustments:
2025 2025 2024 2024
£m % £m %
(restated*)
Group tax charge and effective rate 518.0 29.4 610.7 25.6
Add: reported deferred tax charge and effective rate (284.3) (16.1) (274.9) (11.5)
Reported current tax charge and effective rate 233.7 13.3 335.8 14.1
Effect of adjusting items (2.4) 1.2
Reported current tax charge and effective rate on adjusted basis 233.7 10.9 335.8 15.3
add:
Share of current tax from joint ventures and associates 45.1 2.2 38.5 1.8
less:
Current tax credit on exceptional items 5.3 0.2 4.7 0.2
Share of current tax attributable to non-controlling interests 12.3 0.6 (8.0) (0.4)
Adjusted current tax charge and effective rate 296.4 13.9 371.0 16.9
*The comparative adjusted effective rate of tax has been restated. See note
2.3.2.
10. Dividends
10.1 Ordinary dividends
2025 Total Settled via scrip Pence per ordinary share 2024 Total Settled via scrip Pence per ordinary share
£m £m £m £m
Interim - year ended 31 March 2025 233.7 43.4 21.2 - - -
Final - year ended 31 March 2024 437.3 225.5 40.0 - - -
Interim - year ended 31 March 2024 - - - 218.3 8.8 20.0
Final - year ended 31 March 2023 - - - 738.1 29.8 67.7
671.0 268.9 956.4 38.6
The final dividend of 40.0p per ordinary share declared in respect of the
financial year ended 31 March 2024 (2023: 67.7p) was approved at the Annual
General Meeting on 18 July 2024 and was paid to shareholders on 19 September
2024. Shareholders were able to elect to receive ordinary shares credited as
fully paid instead of the cash dividend under the terms of the Company's scrip
dividend scheme.
For dividends paid in relation to the financial year ended 31 March 2022 and
in relation to the subsequent years to 31 March 2027, the Group's approved
policy is to repurchase shares to reduce the scrip's dilutive effects, if the
scrip take-up exceeds 25% of the full year dividend in any given year. The
overall scrip dividend take-up for the financial year ended 31 March 2024 was
35.7% (March 2023: 18.0% - no scrip buyback) and therefore under the share
buyback programme 3.8m of shares were repurchased during the year ended 31
March 2025 for total consideration of £71.7m (including stamp duty and
commission).
An interim dividend of 21.2p per ordinary share (2024: 20.0p) was declared and
paid on 27 February 2025 to those shareholders on the SSE plc share register
on 3 January 2025. Shareholders were able to elect to receive ordinary shares
credited as fully paid instead of the interim cash dividend under the terms of
the Company's scrip dividend scheme.
The proposed final dividend of 43.0p per ordinary share based on the number of
issued ordinary shares at 31 March 2025 is subject to approval by shareholders
at the Annual General Meeting and has not been included as a liability in
these financial statements. Based on shares in issue at 31 March 2025, this
would equate to a final dividend of £477.8m.
11. Earnings per share
11.1 Basic earnings per share
The calculation of basic earnings per ordinary share at 31 March 2025 is based
on the net profit attributable to ordinary shareholders and a weighted average
number of ordinary shares outstanding during the year ended 31 March 2025.
11.2 Adjusted earnings per share
Adjusted earnings per share has been calculated by excluding the charge for
deferred tax, retained Gas Production decommissioning costs, the depreciation
charged on fair value uplifts, the share of profit attributable to
non-controlling interests and the impact of exceptional items and certain
re-measurements (note 7).
2025 2025 2024 2024
Continuing operations Earnings Earnings per share Earnings Earnings per share
£m pence £m pence
(restated*) (restated*)
Basic earnings attributable to ordinary shareholders on continuing operations 1,189.4 108.2 1,710.5 156.7
used to calculate adjusted EPS
Exceptional items and certain re-measurements (note 7) 341.4 31.1 (155.8) (14.3)
Basic excluding exceptional items and certain re-measurements 1,530.8 139.3 1,554.7 142.4
Adjusted for:
Decommissioning Gas Production (17.9) (1.6) 9.9 0.9
Depreciation charge on fair value uplifts 20.1 1.8 19.0 1.7
Deferred tax (note 9) 312.7 28.4 178.5 16.3
Deferred tax from share of joint ventures and associates (36.1) (3.2) 20.3 1.9
Deferred tax on non-controlling interest (41.5) (3.8) (25.6) (2.3)
Adjusted 1,768.1 160.9 1,756.8 160.9
Basic 1,189.4 108.2 1,710.5 156.7
Dilutive effect of outstanding share options - (0.1) - (0.2)
Diluted 1,189.4 108.1 1,710.5 156.5
11. Earnings per share (continued)
11.2 Adjusted earnings per share (continued)
The weighted average number of shares used in each calculation is as follows:
31 March 2025 31 March 2024
Number of shares Number of shares
(millions) (millions)
For basic and adjusted earnings per share 1,099.2 1,091.8
Effect of exercise of share options 1.1 1.5
For diluted earnings per share 1,100.3 1,093.3
11.3 Dividend cover
The Group's adjusted dividend cover metric is calculated by comparing adjusted
earnings per share on continuing operations to the projected dividend per
share payable to ordinary shareholders.
2025 2025 2025 2024 2024 2024
Earnings per share Dividend per share Dividend Cover Earnings per share Dividend per share Dividend cover
(pence) (pence) (times) (pence) (pence) (times)
Reported earnings per share (continuing operations) 108.2 64.2 1.69 156.7 60.0 2.61
Adjusted earnings per share (continuing operations) (restated*) 160.9 64.2 2.51 160.9 60.0 2.68
*The comparative adjusted earnings per share and dividend cover (times) have
been restated. See note 2.3.2.
12. Acquisitions and disposals
12.1 Acquisitions
12.1.1 Current year acquisitions
There have been no significant acquisitions in the current year.
12.1.2 Prior year acquisitions
Enerveo acquisition
On 22 March 2024, the Group completed the acquisition of Enerveo Limited
('Enerveo') from Aurelius Antelope Limited ('Aurelius') for cash consideration
of £1.0m. Enerveo (formerly named SSE Contracting Limited) is a former
subsidiary of the Group that was disposed to Aurelius on 30 June 2021. The
reacquisition of Enerveo resulted in a net gain of £4.6m, which was
recognised as an exceptional item.
12.2 Disposals
Current and prior year disposals
There have been no significant disposals in the current and prior year.
13. Sources of finance
13.1 Capital management
The Board's policy is to maintain a strong balance sheet and credit rating to
support investor, counterparty and market confidence in the Group and to
underpin future development of the business. The Group's credit ratings are
also important in maintaining an efficient cost of capital and in determining
collateral requirements throughout the Group. As at 31 March 2025, the Group's
long term credit rating was BBB+ stable outlook for Standard and Poor's and
Baa1 stable outlook for Moody's. The Group is also BBB+ stable outlook with
Fitch however this rating is on an unsolicited basis.
The maintenance of a medium term corporate model is a key control in
monitoring the development of the Group's capital structure and allows for
detailed scenarios and sensitivity testing. Key ratios drawn from this
analysis underpin regular updates to the Board and include the ratios used by
the rating agencies in assessing the Group's credit ratings.
The Group's debt requirements are principally met through issuing bonds
denominated in Sterling and Euros as well as private placements and medium
term bank loans including those with the European Investment Bank.
SSE's adjusted net debt and hybrid capital was £10.2bn at 31 March 2025,
compared with £9.4bn at 31 March 2024.
The Group has an established €1.5bn Euro commercial paper programme (paper
can be issued in a range of currencies and swapped into Sterling) and as at 31
March 2025 there was £891m commercial paper outstanding (2024: £840m). The
Group also continues to have access to £3.0bn of revolving credit facilities
(2024: £3.5bn) following re-financing in the current year as detailed in note
13.2.1. The facilities include £1.5bn relating to Scottish Hydro Electric
Transmission plc (2024: £0.8bn) and £1.5bn relating to SSE plc (2024:
£2.5bn). As at 31 March 2025 there were £340m drawings on the Scottish Hydro
Electric Transmission plc facility being 23% utilisation (2024: nil
utilisation) and no drawings on the SSE plc facility (2024: nil utilisation).
13. Sources of finance (continued)
13.1 Capital management (continued)
The Group capital comprises:
2025 2024
£m £m
(restated*)
Total borrowings (excluding lease obligations) 10,149.4 8,726.2
Less: Cash and cash equivalents (1,090.5) (1,035.9)
Net debt (excluding hybrid equity) 9,058.9 7,690.3
Hybrid equity 1,882.4 1,882.4
External net debt attributable to non-controlling interests (817.9) (490.2)
Cash held/(posted) as collateral and other deposits 63.3 353.2
Adjusted net debt and hybrid capital 10,186.7 9,435.7
Equity attributable to shareholders of the parent 10,181.6 9,365.8
Total capital excluding lease obligations 20,368.3 18,801.5
*The comparative has been restated. See note 2.3.3.
Under the terms of the revolving credit and private placement borrowing
facilities, the Group is required to comply with the following financial
covenant:
· Interest Cover Ratio: The Group shall procure that the ratio of
Operating Profit to Net Interest Payable for any relevant period is not less
than 2.5 to 1.
Under the terms of the Scottish Hydro Electric Transmission plc revolving
credit facility and private placements the Group is required to comply with
the following financial covenant:
· Net debt to Regulatory Asset Value: Scottish Hydro Electric
Transmission plc shall procure that the consolidated net debt to Regulatory
Asset Value does not at any time exceed 0.80 to 1.00 as assessed by their
financial statements.
The following definitions apply in the calculation of these financial
covenants:
· "Operating Profit" means, in relation to a relevant period, the
profit on ordinary activities before taxation (after adding back Net Interest
Payable) of the Group for that relevant period but after adjusting this amount
to exclude any exceptional profits (or losses) and, for the avoidance of
doubt, before taking account of any exceptional profits (or losses) and
excluding the effect of IFRS 9 re-measurements.
· "Net Interest Payable" means, in respect of any relevant period,
interest payable during that relevant period less interest receivable during
that relevant period.
In summary, the Group's intent is to balance returns to shareholders between
current returns through dividends and long-term capital investment for growth.
In doing so, the Group will maintain its capital discipline and will continue
to operate within the current economic environment prudently. There were no
changes to the Group's capital management approach during the year.
13.2 Loans and other borrowings
2025 2024
£m £m
Current
Short-term loans 1,895.5 1,044.5
Lease obligations 68.5 83.5
1,964.0 1,128.0
Non-current
Loans 8,253.9 7,681.7
Lease obligations 386.5 324.0
8,640.4 8,005.7
Total loans and borrowings 10,604.4 9,133.7
Cash and cash equivalents (1,090.5) (1,035.9)
Unadjusted net debt 9,513.9 8,097.8
Add/(less):
Hybrid equity (note 14) 1,882.4 1,882.4
External net debt attributable to non-controlling interests (see below) (817.9) (490.2)
Lease obligations (455.0) (407.5)
Cash held/(posted) as collateral and other deposits 63.3 353.2
Adjusted net debt and hybrid capital 10,186.7 9,435.7
The adjustment relating to the non-controlling interest share of Scottish
Hydro Electric Transmission plc external net debt is £817.9m at 31 March 2025
(2024: £490.2m) and relates to 25% of external loans of £3,278.8m (2024:
£2,088.0m) net of cash and cash equivalents of £7.3m (2024: £127.4m). Cash
and cash equivalents (which are presented as a single class of asset on the
face of the balance sheet) comprise cash at bank and short term highly liquid
investments with a maturity of three months or less.
13. Sources of finance (continued)
13.2 Loans and other borrowings (continued)
13.2.1 Borrowing facilities
The Group has an established €1.5bn Euro commercial paper programme (paper
can be issued in a range of currencies and swapped into Sterling) and as at 31
March 2025 there was £891m commercial paper outstanding (2024: £840m).
The Group also has access to £3.0bn of revolving credit facilities (2024:
£3.5bn). On 23 October 2024 the Group's facilities were re-financed with the
£0.75bn facility relating to Scottish Hydro Electric Transmission plc being
increased to £1.5bn, the £2.5bn of facilities relating to SSE plc being
reduced to £1.5bn by cancellation of a facility due to mature in February
2025, and the cancellation of the Distribution facility of £0.25bn which is
no longer required.
The details of the Group's committed facilities as at 31 March 2025 are:
· a £1.5bn revolving credit facility for SSE plc maturing October
2029 with two 1 year extension options; and
· a £1.5bn revolving credit facility for Scottish Hydro Electric
Transmission plc maturing October 2029 with two 1 year extension options.
The re-financing of the committed facilities was undertaken to ensure the
Group is set up to meet its funding obligations over the next five years, with
available committed facilities on the entities that require them. The
opportunity was also taken to increase the number of relationship banks from
11 to 15, which supports the Group's growth plans and funding requirements
over the next five years. The £1.5bn revolving credit facility for SSE plc is
in place to provide back-up to the commercial paper programme and support the
Group's capital expenditure plans. The Scottish Hydro Electric Transmission
plc facility, was entered into to help cover the capital expenditure and
working capital of that business. The terms and conditions of the re-financed
revolving credit facilities contain certain sustainability-linked features
which may or may not adjust the interest margin applicable to the revolving
credit facilities. The rate of interest is calculated annually, subject to
fulfilling certain ESG KPIs and applied prospectively. At 31 March 2025, these
terms had no impact on the carrying value of the debt.
As at 31 March 2025 there were £340m drawings on the Scottish Hydro Electric
Transmission plc facility, being 23% utilisation (2024: nil utilisation), and
no drawings on the SSE plc facility (2024: nil utilisation).
During the year SSE plc issued a 7 year €600m Green Bond at a coupon of
3.5%. The bond has been predominantly left in Euros as a net investment hedge
for the Group's Euro denominated subsidiaries. In the year, SSE plc also
issued £0.9bn of debt and had £1.0bn of debt maturities. The issued debt
primarily relates to £0.8bn of Commercial Paper being rolled at maturity,
which also accounts for £0.8bn of the debt maturities, with the only
additional debt maturity being €320m (£204m) of 12 year US Private
Placements that matured in April 2024.
During the year Scottish Hydro Electric Transmission plc issued £0.9bn of new
debt, in addition to the drawings on the committed facility. The three
issuances of new debt were as follows:
· August 2024 - €850m (£715m) 8 year green Eurobond maturing 4
September 2032 with a coupon of 3.375% and an all-in GBP cost of 4.9127% once
swapped back to Sterling;
· June 2024 - 1.5bn NOK (£111m) 10 year private placement maturing
26 June 2034 with a coupon of 4.731% and an all-in GBP cost of 5.3315% once
swapped back to Sterling; and
· July 2024 - £30m 15 year private placement maturing 19 July 2039
with a coupon of 5.591%.
The weighted average incremental borrowing rate applied to lease liabilities
during the year was 4.95% (2024: 4.98%). Incremental borrowing rates applied
to individual lease additions in the year ranged between 3.85% to 7.46% (2024:
3.70% to 5.25%).
13.3 Reconciliation of net increase in cash and cash equivalents to
movement in adjusted net debt and hybrid capital
2025 2024
£m £m
Increase in cash and cash equivalents 54.6 144.1
(Less)/add:
New borrowing proceeds (2,592.2) (1,982.2)
Repayment of borrowings 1,055.3 1,744.0
Non-cash movement on borrowings 113.7 166.0
Increase in external net debt attributable to non-controlling interests 327.7 56.0
Decrease/(increase) in cash held and posted as collateral and other deposits 289.9 (669.5)
Increase in adjusted net debt and hybrid capital (751.0) (541.6)
14. Equity
14.1 Share capital
Number
(millions) £m
Allotted, called up and fully paid:
At 1 April 2024 1,096.2 548.1
Issue of shares (i) 15.0 7.5
At 31 March 2025 1,111.2 555.6
The Company has one class of ordinary share which carries no right to fixed
income. The holders of ordinary shares are entitled to receive dividends as
declared and are entitled to one vote per share at meetings of the Company.
(i) Shareholders were able to elect to receive ordinary shares in
place of the final dividend of 40.0p per ordinary share (in relation to year
ended 31 March 2024) and the interim dividend of 21.2p (in relation to the
current year) under the terms of the Company's scrip dividend scheme. This
resulted in the issue of 12.2m and 2.8m new fully paid ordinary shares
respectively (2024: 1.8m and 0.5m). In addition, the Company issued 1.7m
(2024: 0.8m) shares during the year to satisfy awards to employees under
certain employee share schemes (all of which were settled by shares held in
Treasury) for a consideration of £17.8m (2024: £9.2m).
Under the share buyback programme in the year to 31 March 2025, 3.8m shares
were repurchased for a total consideration of £71.7m (including stamp duty
and commission). The scrip dividend take-up for the prior financial year was
18.0%, which was below the 25.0% required by the share buyback programme,
therefore there were no share buybacks in the prior financial year ended 31
March 2024.
Of the 1,111.2m shares in issue, 4.9m are held as treasury shares. These
shares will be held by SSE plc and used to satisfy awards to employees under
certain employee share schemes.
During the year, on behalf of the Company, the employee share trust purchased
0.8m shares for a total consideration of £14.1m (2024: 1.3m shares,
consideration of £21.8m) to be held in trust for the benefit of employee
share schemes. At 31 March 2025, the trust held 6.7m shares (2024: 6.9m) which
had a market value of £107.1m (2024: £113.9m).
14.2 Hybrid Equity
2025 2024
£m £m
GBP 600m 3.74% perpetual subordinated capital securities (i) 598.0 598.0
EUR 500m 3.125% perpetual subordinated capital securities (i) 453.0 453.0
EUR 1,000m 4.00% perpetual subordinated capital securities (ii) 831.4 831.4
1,882.4 1,882.4
(i) 2 July 2020 £600m and €500m Hybrid Capital Bonds
The hybrid capital bonds issued in July 2020 have no fixed redemption date,
but the Company may, at its sole discretion, redeem all but not part of the
capital securities at their principal amount. The date for the first potential
discretionary redemption of the £600m hybrid bond is 14 April 2026 and then
every 5 years thereafter. The date for the first potential discretionary
redemption of the €500m hybrid capital bond is 14 July 2027 and then every 5
years thereafter. For the £600m hybrid the discretionary coupon payments are
made annually on 14 April and for the €500m hybrid the coupon payments are
made annually on 14 July.
(ii) 12 April 2022 €1,000m Hybrid Capital Bonds
The hybrid capital bond issued in April 2022 has no fixed redemption date, but
the Company may, at its sole discretion, redeem all but not part of the
capital securities at their principal amount. The date for the first potential
discretionary redemption is 21 April 2028 and then every 5 years thereafter.
The discretionary hybrid coupon payments are made annually on 21 April.
Coupon Payments
In relation to the £600m hybrid equity bond a discretionary coupon payment of
£22.4m (2024: £22.4m) was made on 14 April 2024. For the €500m hybrid
equity bond a discretionary coupon payment of £16.5m (2024: £16.5m) was made
on 14 July 2024, and for the €1bn hybrid equity bond a discretionary coupon
payment of £34.8m (2024: £34.2m) was made on 21 April 2024.
The coupon payments in the year to 31 March 2025 consequently totalled £73.7m
(2024: £73.1m).
The Company has the option to defer coupon payments on the bonds on any
relevant payment date, as long as a dividend on the ordinary shares has not
been declared. Deferred coupons shall be satisfied only on redemption; or on a
dividend payment on ordinary shares, both of which occur at the sole option of
the Company. Interest will accrue on any deferred coupon.
14.3 Equity attributable to non-controlling interests
This relates to equity attributable to non-wholly owned but controlled
subsidiaries which are consolidated within the financial statements of the
Group. At 31 March 2025 the amount attributable to non-controlling interests
is £628.8m (2024: £554.9m restated), which relates to SHET of £589.6m
(2024: £514.1m restated) and SSE Pacifico £39.2m (2024: £40.8m). The profit
and loss attributable to non-controlling interests for the year ended 31 March
2025 is £69.8m gain (2024: £100.8m gain), which relates to SHET £70.6m gain
(2024: £101.5m gain) and SSE Pacifico £0.8m loss (2024: £0.7m loss).
The comparative has been restated. See note 2.3.3.
15. Retirement benefit obligations
15.1 Valuation of combined pension schemes
Quoted Unquoted Value Quoted Unquoted Value
at 31 March 2025 at 31 March 2024
£m £m £m £m £m £m
Equities 173.2 - 173.2 196.9 - 196.9
Government bonds 1,180.6 - 1,180.6 1,215.3 - 1,215.3
Insurance contracts - 454.4 454.4 - 500.3 500.3
Other investments 942.1 - 942.1 1,102.7 - 1,102.7
Total fair value of plan assets 2,295.9 454.4 2,750.3 2,514.9 500.3 3,015.2
Present value of defined benefit obligation (2,248.5) (2,593.6)
Surplus in the schemes 501.8 421.6
Deferred tax thereon (i) (125.5) (105.4)
Net pension asset 376.3 316.2
(i) Deferred tax rate of 25% (2024: 25%) applied to net pension
surplus position.
Balance sheet presentation Balance sheet presentation
2024
2025
£m £m
Retirement benefit asset 501.8 421.6
Pension asset 501.8 421.6
Movements in the combined defined benefit assets and obligations during the
year:
2025 2024
Assets Obligations Total Assets Obligations Total
£m £m £m £m £m £m
At 1 April 3,015.2 (2,593.6) 421.6 3,188.6 (2,647.5) 541.1
Included in income statement
Current service cost - (15.0) (15.0) - (16.2) (16.2)
Past service cost - (4.7) (4.7) - (2.4) (2.4)
Interest income/(cost) 141.3 (120.6) 20.7 148.5 (122.3) 26.2
141.3 (140.3) 1.0 148.5 (140.9) 7.6
Included in other comprehensive income
Actuarial gain/(loss) arising from:
Demographic assumptions - 20.9 20.9 - 29.3 29.3
Financial assumptions - 288.5 288.5 - 53.7 53.7
Experience assumptions - 1.9 1.9 - (46.2) (46.2)
Return on plan assets excluding interest income (258.5) - (258.5) (192.0) - (192.0)
(258.5) 311.3 52.8 (192.0) 36.8 (155.2)
Other
Contributions paid by the employer 26.4 - 26.4 28.1 - 28.1
Scheme participant's contributions 0.1 (0.1) - 0.1 (0.1) -
Benefits paid (174.2) 174.2 - (158.1) 158.1 -
(147.7) 174.1 26.4 (129.9) 158.0 28.1
At 31 March 2,750.3 (2,248.5) 501.8 3,015.2 (2,593.6) 421.6
Charges/(credits) recognised:
2025 2024
£m £m
Service costs (charged to operating profit) 19.7 18.6
(Credited)/charged to finance costs:
Interest on pension scheme assets (141.3) (148.5)
Interest on pension scheme liabilities 120.6 122.3
(20.7) (26.2)
16. Financial risk management
16.1 Financial risk management
The Board has overall responsibility for the establishment and oversight of
the Group's risk management framework. The Group's policies for risk
management are established to identify the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to
limits. Exposure to commodity, currency and interest rate risks arise in the
normal course of the Group's business and derivative financial instruments are
entered into to hedge exposure to these risks.
SSE has a Group wide risk committee reporting to the Group Executive
Committee, which is responsible for reviewing the strategic, market, credit,
operational and liquidity risks and exposures that arise from the Group's
operating activities. In addition, the Group has two dedicated Energy Market
risk committees reporting to the Group Executive Committee and Board
respectively, with the Group Executive Sub-committee chaired by the Group
Chief Commercial Officer (the "Group Energy Markets Exposures Risk Committee")
and the Board Sub-committee chaired by Non-Executive Director Tony Cocker (the
"Energy Markets Risk Committee (EMRC)"). These Committees oversee the Group's
management of its energy market exposures, including its approach to hedging.
During the year ended 31 March 2025, the Group continued to be exposed to the
economic conditions impacting the primary commodities to which it is exposed
(Gas, Carbon and Power). The Group's approach to hedging, and the diversity of
its energy portfolios (across Wind, Hydro, Thermal and Customers) has provided
certain mitigation of these exposures.
Exposure to the commodity, currency and interest rate risks noted arise in the
normal course of the Group's business and derivative financial instruments are
entered into to hedge exposure to these risks. The objectives and policies for
holding or issuing financial instruments and similar contracts, and the
strategies for achieving those objectives that have been followed during the
year are explained within A6 Accompanying Information to the Group's
consolidated financial statements.
The net movement reflected in the income statement can be summarised as
follows:
2025 2024
£m £m
Operating derivatives
Total result on operating derivatives (i) 92.9 (573.1)
Less: amounts settled (ii) (141.9) 1,025.3
Movement in unrealised derivatives (49.0) 452.2
Financing derivatives (and hedged items)
Total result on financing derivatives (i) 63.6 370.6
Less: amounts settled (ii) (50.8) (364.5)
Movement in unrealised derivatives 12.8 6.1
Financial guarantee liabilities
Total result on financial guarantee liabilities (iii) 1.9 12.5
Net income statement impact (34.3) 470.8
(i) Total result on derivatives in the income statement represents the
total amounts credited or (charged) to the income statement in respect of
operating and financial derivatives.
(ii) Amounts settled in the year represent the result on derivatives
transacted which have matured or been delivered and have been included within
the total result on derivatives.
(iii) Total result on financial guarantee liabilities in the income
statement represents the total amounts credited or (charged) to the income
statement in respect of the unwind of the financial liabilities and
recognition of new or expiring contracts.
16. Financial risk management (continued)
16.2 Fair value hierarchy
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into Levels
1 to 3 based on the degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from unadjusted
quoted market prices for identical assets or liabilities.
· Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices)
· Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not based
on observable market data.
2025 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Financial assets
Energy derivatives 71.5 80.9 5.8 158.2 357.7 121.6 0.5 479.8
Interest rate derivatives - 68.9 - 68.9 - 113.0 - 113.0
Foreign exchange derivatives - 14.8 - 14.8 - 7.5 - 7.5
Unquoted equity investments - - 8.8 8.8 - - 3.2 3.2
71.5 164.6 14.6 250.7 357.7 242.1 3.7 603.5
Financial liabilities
Energy derivatives - (80.8) (81.3) (162.1) - (327.1) (101.3) (428.4)
Interest rate derivatives - (107.8) - (107.8) - (95.8) - (95.8)
Foreign exchange derivatives - (24.1) - (24.1) - (43.2) - (43.2)
Loans and borrowings * - 88.6 - 88.6 - (0.9) - (0.9)
- (124.1) (81.3) (205.4) - (467.0) (101.3) (568.3)
* The £88.6m relates to fair value hedges that are in place against the
Group's loans and borrowings and has been included in the table above within
financial liabilities, as it is presented in loans and borrowings liabilities
in the balance sheet.
There were no significant transfers out of Level 1 into Level 2 and out of
Level 2 into Level 1 during the current and prior year. There were no
significant transfers out of Level 2 into Level 3 and out of Level 3 into
Level 2 during the current and prior year.
17. Capital commitments
2025 2024
£m £m
Capital expenditure:
Contracted for but not provided 4,438.3 1,389.2
Contracted for but not provided capital commitments include the fixed
contracted costs of the Group's major capital projects. In practice
contractual variations may arise on the final settlement of these contractual
costs. The increase from the prior year relates primarily to Transmission
projects.
18. Related party transactions
The following transactions took place during the year between the Group and
entities which are related to the Group, but which are not members of the
Group. Related parties are defined as those in which the Group has control,
joint control or significant influence over.
2025 2024
Sale of goods and services Purchase of goods and services Amounts owed from Amounts owed to Sale of goods and services Purchase of goods and services Amounts owed from Amounts owed to
£m £m £m £m £m £m £m £m
Joint ventures:
Marchwood Power Limited 111.2 (116.1) - (5.0) 42.6 (63.2) - (13.0)
Clyde Windfarm (Scotland) Limited 5.6 (187.6) 0.1 (51.6) 5.6 (153.9) - (48.7)
Beatrice Offshore Windfarm Limited 6.3 (86.1) 1.2 (7.1) 4.8 (75.5) 2.0 (6.8)
Stronelairg Wind Farm Limited 2.6 (88.4) 0.1 (25.1) 2.5 (75.6) - (20.8)
Dunmaglass Wind Farm Limited 1.2 (32.6) - (9.0) 1.1 (32.2) - (8.6)
Neos Networks Limited 6.8 (28.2) 2.1 (4.0) 3.8 (28.5) 6.1 (4.7)
Seagreen Wind Energy Limited 54.6 (171.5) 13.6 (16.8) 19.8 (113.4) 11.3 (11.7)
Doggerbank A, B, C and D 47.7 (2.8) 36.5 (1.0) 36.5 - 10.7 -
Other joint arrangements 31.4 (172.1) 13.1 (54.3) 18.0 (209.4) 6.7 (63.9)
The transactions with Marchwood Power Limited relate to the contracts for the
provision of energy or the tolling of energy under power purchase
arrangements.
The amounts outstanding are trading balances, are unsecured and will be
settled in cash.
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