SSE’s full-year revenue rose 1% to £10.2bn. Expanded renewable capacity and inflation-linked tariff increases in Transmission was largely offset by declines in other business units.
Underlying operating profit fell 8% to £2.2bn driven by a large, expected decline in Distribution profitability as last year’s performance benefitted from a periodic inflation adjustment.
Free cash outflows widened from £0.2bn to £0.7bn, driven by increased levels of infrastructure investment. Underlying net debt remained broadly flat at £10.1bn, helped by a £2.0bn equity raise in November 2025.
In the year ahead, investment spending is expected to increase from £3.6bn to over £5.0bn. Underlying earnings per share is expected to land between 168 and 193p (2026: 153.5p).
A final dividend of 47.3p per share was announced, taking the full-year total to 68.7p, up 7%.
The shares were broadly flat in early trading.
Our view
SSE’s full-year results were broadly in line with expectations as growth in some divisions was offset by declines in other areas of the business. Looking ahead, infrastructure investment is set to ramp up by more than 38% next year as the group enters a new era of growth.
SSE delivers electricity across Scotland and Southern England. This is classic utility territory - with revenues predictable and profits closely regulated. On top of that, it generates energy from gas-fired power plants and renewable sources, such as wind farms.
The group’s playing its part in the energy transition, with plans to spend £33bn over the five years to 2029/30 upgrading its energy infrastructure. Most of this total, around 80%, is set to be spent on its regulated UK electricity networks.
We like the shift in investment focus towards networks, which should see its regulated asset base grow by around 30% annually over the period. With this division’s revenue power tied to the value of its asset base, it should help fuel top-line growth in the years to come. These revenues are also positively linked to inflation, which provides valuable protection if macroeconomic conditions deteriorate and increases the group’s overall earnings quality.
Renewables remain a key, albeit relatively smaller part of the plan moving forward, with billions of pounds also set to be invested in expanding their capacity. But this comes with a hefty dose of risk - they're not always reliable. To some degree, it's at the mercy of Mother Nature.
That’s why more flexible gas-fired plants are still part of the energy mix. They complement the renewables segment well and are on hand to plug any shortfalls in energy output when adverse weather comes along.
Despite the potential benefits of increased investment spending, the additional return isn't received until some time after the investment and service to customers have been delivered. That means it will drag on cash flows in the short term.
There’s plenty of liquidity available to help cover the costs in the meantime, so we’re not too concerned. And although debt levels are expected to rise in the coming years, the balance sheet should remain in good shape.
SSE’s planned investments are expected to drive double-digit earnings growth over the next few years. Despite the relatively strong outlook, the group trades at a discount to the broader sector. We see the Network businesses as a high-quality asset, and as it becomes a bigger part of the business, there’s scope for this discount to close. However, the step-up in investment brings execution risks. Any missteps will likely see the valuation punished.
Environmental, social and governance (ESG) risk
The utilities industry is high-risk in terms of ESG. Management of these risks tends to be strong, with European firms outperforming their overseas counterparts. Environmental risks like carbon emissions, resource use and non-carbon emissions and spills tend to be the most significant risks for this industry. Employee health and safety and community relations are also key risks to monitor.
According to Sustainalytics, SSE’s management of ESG risk is strong.
It has a board-level committee overseeing ESG issues such as health, safety, and environmental programmes. SSE ceased operating its last coal plant in 2020, and it has a large pipeline of wind projects. However, there is new and existing gas- and oil-based capacity. The regulator has also fined it several times for breaches related to charges imposed on customers.
SSE key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember that yields are variable and not a reliable indicator of future income. Keep in mind that key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.