Sse Share Discussion Threads

[pierre oreilly] 02/12/2021 16:02

I think we've got much higher rises to come. Everyone's at the gov cap - well unless the gov want even the big suppliers to go belly up, they have to increase the cap by 50/75% to break even today.

The reason for the price rise is the 'greening' of the grid. Contrary to what most think, windmills are extremely expensive generators since they need standby generation in case the wind drops. A billion pa is new expense just to pay for the capacity market, which helps to reduce the probability of powercuts on low wind days (basically paying for some old coal to come back on line, and other reliable generation). On the one hand, the gov want rid of coal and gas, and on the other they pay, via the capacity market, for coal and gas to be ready to generate.

That's why bills are rocketing - nothing unexpected, just following the german experience. The lie, of course, is that punters were told wind is cheap (free even) whereas its as expensive as it gets, once the factors the grid has to make to correct for its intermittency are taken into account.

btw, BP and SEE between them are building another 13 GW of more wind - just making the situation worse, not better. But they'll be very well rewarded (by you and me via various guarantees) for doing so, even though it makes no sense.

[marktime1231] 02/12/2021 15:34

So much for Ofgem's price caps, it is driving challenger companies out of business and yet consumer charges are still rocketing.

Ovo who are still branded as SSE Retail Energy put my monthly charges up 28% in September and have just put them up another 11%, in order they say to avoid a sudden spike in future while reserving the right to spike them up again in April.

Ofgem and its communist era policies are a failure. Stop interfering.

[wad collector] 25/11/2021 09:36

I'm not here for the yield or for capital growth , just to get away from the wife.

But my conclusion is that it still seems a reasonable place to be long , although there will presumably be more political risk next election.

[bountyhunter] 22/11/2021 13:22

Renewables companies rely more on growth in capital value at least initially so there's every prospect of that as the capital already in the plans and the additional £4b is progressively invested. The yield is still attractive for a company which is significantly increasing its renewables focus.

[contango1] 22/11/2021 11:08

There has been 4bN invested in "renewables' with the prospect of a second dividend cut, we are expected to believe that a further 4bN invested in "renewables" will deliver growth, whatever that means, it doesn't seem likely to be in dividends.

[bountyhunter] 21/11/2021 17:36

Not everyone is here just for the yield although I appreciate some will have been hence the recent drop. I'm here primarily for the renewable growth and secondly for the yield and have been for some time now so won't be selling. Don't get me wrong the rebased dividend has been an unexpected shock but as it's in exchange for an extra £1b of investment in renewables each year I'll accept that, albeit a little reluctantly! To be honest I think the board did this to defeat Elliott.

[marktime1231] 21/11/2021 15:14

Isn't bad except when inflation hits 4-5%. Let's not pretend 3-4% is what we are here for, we are high yield income investors looking for 6% or more and accept the risks which go with that. No-one is going to be content with low income unless there is an exciting growth prospect to go with it.

SSE has staked itself to a hybrid income-funding-growth strategy which might look OK to dull fund managers but it does not attract high income or out-and-out growth investors. The mongrel SSE will not appeal to either camp, maybe Singer was right and a split was a better option

Like others writing recently I will be looking to reinvest for better yield, in case the share price deflates itself.

[sd_anon] 21/11/2021 14:06

Like many, one of the attractions of SSE for me was the yield but also the growth opportunity from renewables. Having considered the rebased divi I am happy to hold. 60p on a share price of 1600p is still 3.75% which isn't bad when coupled with growth. Utilities traditionally paid more as growth was meagre at best but the anticipated growth opportunity changes things.

[bountyhunter] 18/11/2021 21:52

I agree there, many investors may have been holding primarily for the yield and so this has not gone down well with them. Many of those investors will gradually be being replaced by new renewable energy focused investors who will accept the rebased yield in exchange for the accelerated growth of renewables. It's the shock change that has caused the problem not the long term plan imv so we should recover over time.

[pander45] 18/11/2021 21:44

When dividends are rebased this frequently the trend shakes investor confidence. Few saw this coming and the market dislikes shocks. Hence, badly handled.

[williamcooper104] 18/11/2021 21:27

Yep badly handled as long looked inevitable

[pander45] 18/11/2021 21:12

Not handled well at all imho.

[pander45] 18/11/2021 17:59

Disappointing dividend cut. I see this drifting now towards 1200.

[pierre oreilly] 18/11/2021 11:16

The average divi over the next 5 years is about 4.2% at today's price by my calcs from what they said (anyone else calculated that?).

They have (rightly or wrongly) decided that and told the market, managing expectations. They leave room to pay a little more divi to exceed those set expectations.

If wind subsidies don't change (and stay ridiculous, which is likely imv) then the strategy is correct (for sse and its shareholders). But cack for electricity consumers and taxpayers who foot the massive subsidies of course, and likely will soon suffer electricity rationing.

[contango1] 18/11/2021 11:04

Three years ago 100p dividend seemed within reach. After two "re-basings" (cuts) the five year prospect for the dividend is 60p. A realistic share price would be c.1000p (6% yield). And yes I have sold, at prices of 1570 to 1650.

[williamcooper104] 18/11/2021 08:33

The dividend cut is a good thing - it wasn't sustainable with the capex burden; without putting undue stress to the balance sheet Management are muppets for not communicating this earlier - it should not have been announced as a surprise

[pierre oreilly] 18/11/2021 08:24

Oh well, very strange. I'd expect everyone with a c.eng to grasp the question posed and have a bash at answering it.Obviously not.

[rogerrail] 18/11/2021 07:51

Its easier to do this than invest capital into electrolysers coupled with the uk's current limit of 0.1% H2 in the gas grid even though modern appliances can cope with 20% with no modification. As I said its down to govt having the will to effect rapid change. For more info as to developments going on even though far too slowly search HyDeploy.

[pierre oreilly] 17/11/2021 18:14

Well answer the question i posed then. Tell us why windmills, especially in Scotland, are frequently instructed by NG to feather and stop generating (incidentally, thereby initiating payments to the windmill owners in excess of the payments were they left to generate) in perfect wind conditions instead of being told to produce hydrogen and pump it into the gas grid. Simple question for you I'm sure.

As an aside, this is precisely why many, including sse i expect, want to build windfarms in scotland, because the chance of being constrained off by ng is high. It makes sense to windmill owners to build where they hope they won't generate thereby being awarded constraint payments instead of the lower generation payments.

Yes, it's a mad mad green subsidy driven world in the esi.

[bountyhunter] 17/11/2021 17:02

Not a great day, unexpectedly cutting the dividend to defeat Elliott.



As a consolation prize we have the now irrelevant increase in the next interim dividend to look forward to, 25.5p up from 24.4p.

[pierre oreilly] 17/11/2021 17:01

Roger, no I wouldn't like any large industrial building complex next to my house. But what has that got to do with anything?

I certainly wouldn't like a big windfarm within a mile of my house either - those lovely green windmills aren't as harmless as you seem to imagine in your green dreamworld. But again, that's fa to do with sse's results or business.

Thanks for your oh so simple energy analysis. Things always are so very simple when you know fa about the subject. Oh soz, you've googled a bit haven't you. Ever wondered why no one (apart from researchers) are actually generating hydrogen from windmills, pumping it into the gas grid, and saving millions of tons of co2? There's no doubt that that is possible, but many things are possible yet not implemented.

[rogerrail] 17/11/2021 16:49

No doubt you would welcome a new nuke next door to your house? Given the choice I would rather have a wind turbine. Excess renewable energy can be turned into H2 which can be pumped into the gas grid thereby instantly reducing millions of tons in CO2 emmissions created by heating systems.