Scottish & Southern Energy reward income seekers

As electricity company Scottish & Southern Energy announce preliminary results, Graham Spooner, investment adviser at The Share Centre, explains what they mean for investors.

"Scottish & Southern Energy is one of only six FTSE 100 companies to have delivered real dividend growth every year since 1999.  And today it announced its dividend rose by 7.1% to 75p for the year ending 31 March 2011.

"Profit before tax increased by 1.6% to £1,310m - in line with market expectations as we tend to see from utilities companies. The share price has been performing strongly recently as vague speculation of a potential takeover circles the company.

"Investment and capital expenditure was 9.8% more than last year - the company is looking at a medium to longer term strategy to continue to grow its wind farm business in to the future.

"In these volatile times a well managed utility company has many attractions for lower risk investors seeking a safer haven. Scottish & Southern Energy provides an essential business of making electricity and selling it, along with gas operations.

"We currently list Scottish & Southern as a ‘hold' particularly for income seekers due to its attractive dividend. Investors looking for exposure to the utilities sector may wish to take a closer look at Northumbrian water."