SSE

What does the company do?

Following the recent sale of SSE’s retail supply business, the company is mainly focused on developing, operating and owning assets in regulated networks and renewables (particularly onshore and offshore wind farms). It is also in the process of selling its oil and gas production business and has ended coal generation which will substantially help to improve the company’s environmental credentials and help to support its drive towards the decarbonisation of the economy and electrification of transport. Why do we like the investment? The positive changes in the business had been clouded by concerns around Brexit and political risk, but with more clarity on the former and with now limited threat of nationalisation, the company’s attractive characteristics are becoming more widely recognised. SSE has an experienced management team and has generated an attractive dividend yield in the past, while renewables provide a variety of interesting growth opportunities given the company’s expertise and pipeline in this area. Although the COVID-19 virus may impact the company’s B2B supply operations through elevated bad debts, the Investment Manager believes this impact is manageable. Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.