* Pretax profit up 1.6 pct to 1.31 bln pounds, above poll
* Hikes 2011/12 capex 18 percent to 1.7 billion pounds
* Expects to add “a few 100,000” to its customer numbers
* Dividend raised 7.1 percent
* Shares up 1.6 pct at 1348 pence by 1015 GMT
(Adds further details, comments by executive, analyst)
By Adveith Nair
LONDON, May 20 (Reuters) - Scottish & Southern Energy (SSE.L), one of Britain’s biggest utilities, reported a 1.6 percent rise in its pretax profit on Friday and predicted further growth in market share.
SSE said changes in the price of electricity units and improved cost efficiencies in its networks businesses offset higher gas prices and lower output from its hydro electric schemes and wind farms.
It made an underlying pretax profit of 1.31 billion pounds ($2.12 billion) in the year to end-March, slightly above the consensus market forecast of 1.24 billion pounds, according to Thomson Reuters I/B/E/S Estimates.
The Perth, Scotland-based utility added that the economic outlook for the UK and Ireland in 2011/12 remained “uncertain” but Chief Executive Ian Marchant said while growth was not as strong as it was a few years ago, SSE still expected to add “a few 100,000” to its customer numbers across the UK and Ireland.
The company grew its customer base by 300,000 to 9.65 million in the last year.
“It’s pretty simple really,” Marchant said, when asked how SSE planned to add to its market share. “It’s about having a good range of products, be it a telephone offering or an energy efficiency tariff, and a fair and responsible pricing policy.”
Marchant, however, declined to comment on where consumer prices where headed, saying they were subject to the “vagaries of the commodity markets.”
However, the company noted that forward annual wholesale prices for gas rose by over 25 percent between March and October 2010, when it announced a 9.4 percent rise in its gas prices.
“Throughout this time, domestic gas supply was a loss-making activity for SSE and its gas supply business, Southern Electric Gas, has traded at a loss for most of the past few years,” the company added.
Britain’s energy regulator Ofgem said in March a review had found that companies raised their prices faster in response to rising costs than they cut them when costs fell, a claim the “big six” utlities denied. [ID:nLDE74A0LD]
Earlier on Friday, SSE said it would increase capital investment in 2012 by 18 percent, from 1.44 billion pounds in 2011 to 1.7 billion pounds -- the top end of its planned range for annual spending to March 2015.
The company said it plans to spend this money on electricity transmission upgrades as well as to develop new assets including wind farms. Half of its 2010 capital spend went on renewable power generation.
Also on Friday, the company said it would buy a wind farm in North Lincolnshire, which is expected to have an installed capacity of at least 68 megwatts.
Shares in the company were up 1.6 percent at 1348 pence at 1015 GMT on Friday, in a slightly higher overall market.
Investec analyst Angelos Anastasiou said the 2 percent increase in annual profits was “not particularly impressive,” especially given increased levels of spending.
“This has led to consistent cash outflows and increasing net debt,” he said. “Following the recent good run - the shares have risen 12 percent over the past couple of months - we would be tempted to take profits at these levels.”
But the company announced a total dividend of 75 pence for 2011, and increase of 7.1 percent on the previous year’s apyout and said it would continue to aim for an increase of at least 2 percent over the rate of Retail Price Index (RPI) inflation this year and next and further annual RPI-plus increases thereafter. ($1=.6182 pounds) (Editing by Greg Mahlich)