The share prices of utility companies SSE (LON: SSE) (SSE.L) and National Grid (LON: NG) (NG.L) have risen by 1% and 3% respectively in the past month. Both FTSE 100 index (INDEXFTSE: UKX) stocks have released news in that time.
SSE announced on 1 April that is has entered into an agreement to sell its Contracting business to the Aurelius Group. The enterprise value is £27.5 million. This consists of an upfront consideration of £17.5 million that will be adjusted for working capital, separation costs and debt-like items. It also includes a £5 million loan note that will be issued by Aurelius on completion, as well as up to £5 million in an earn out based on EBITDA performance in the 2022 financial year.
According to the company, the disposal forms part of its wider strategy to focus on its core networks and renewables businesses. The Contracting business is one of the largest contracting entities in the UK. It provides a range of mechanical, electrical and street lighting services. The sale process is due to be completed by the end of June 2021.
Commenting on the sale, SSE Finance Director Gregor Alexander said: “It leaves the SSE Group more focused around its renewables and networks core”.
In addition to news of its disposal, the company announced a handful of director dealings in the past month. They were relatively small and consisted of dividend reinvestments and share incentives.
Over the past year the SSE share price has gained 20%, while it is down 3% in the past five years. The FTSE 100 index has risen 17% and 12% over the same time periods. The company’s next investor update is scheduled for release on 26 May when it is due to report its full-year results.
Elsewhere in the utilities industry, there has also been news released concerning the National Grid share price. It announced towards the end of March that current Chair Sir Peter Gershon would step down from the company’s Board on 31 May. Previously, it had announced that he would step down no later than the 2021 AGM.
The firm reported that Paula Rosput Reynolds will assume the position of Chair with effect from 31 May. She joined the Board at the start of 2021 as a non-executive director and Chair Designate.
Other news released by the company has included relatively small director deals in the firm’s shares. They have been part of share incentive plans and stock purchase plans.
Over the past year, the National Grid share price has fallen 5%, while it is down 15% in the last five years. The next investor release expected by the company is its full-year results on 20 May.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.