Confident Investing Starts With TipRanks Premium

Get 55% Off
TipRanks
Go Ultimate55% OFF

SSE (SCT) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. SSE disclosed 12 risk factors in its most recent earnings report. SSE reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2021

Risk Distribution
12Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

No filing history is available.

Risks removedRisks addedRisks changedSSE Risk Factors
Risk Changed (1)
  • Corporate Activity and Growth - Risk 1
    The reshaped SSE Group features an increasing number of significant Joint Ventures (operated and non-operated) both in the UK and Ireland and in other carefully selected geographic locations. SSE must ensure that joint venture structures, governance and operations are robust in order to protect the investments made.

    Key mitigations: • Policy Link: SSE Joint Venture Management Policy • The Group Risk Committee will undertake an additional detailed review of this emerging risk in Q2 of FY 21/22. The output of this review will be reported to the Group Executive Committee for further consideration.

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade

Risk Highlights Q4, 2021

Main Risk Category
Finance & Corporate
With 5 Risks
Number of Disclosed Risks
12
+1
From last report
S&P 500 Average: 32
Recent Changes
1Risks added
0Risks removed
1Risks changed
Since Jun 2021
Number of Risk Changed
1
+1
From last report
S&P 500 Average: 1

Risk Word Cloud

the risk from changes in obligations arising from operating in markets which are subject to a high degree of regulatory, legislative and political intervention and uncertainty.high degree of regulatorythe risk that energy customers’ ability to meet the costs of providing energy, or their ability to access energy services is limited, giving rise to negative political or regulatory intervention that has an impact on sse’s core regulated networks and renewables businesses.costs of providing energythe risk that sse is unable to keep pace with the speed of change affecting the sector and markets in which it operates and so fails to meet the evolving expectations of its stakeholders or achieve its strategic objectives.speed of change affectingthe risk associated with the group’s exposure to fluctuations in both the physical volumes and price of key commodities, including electricity, gas, co2 permits, oil and related foreign exchange values.related foreign exchange valuesthe risk of harm to people, property or the environment from sse’s operations.risk of harm to peoplethe risk that energy customers’ ability to meet the costs of providing energy, or their ability to access energy services is limited, giving rise to negative political or regulatory intervention that has an impact on sse’s core regulated networks and renewables businesses.giving rise to negative politicalthe risk that energy customers’ ability to meet the costs of providing energy, or their ability to access energy services is limited, giving rise to negative political or regulatory intervention that has an impact on sse’s core regulated networks and renewables businesses.ability to access energy servicesthe risk that funding is not available to meet sse’s financial liabilities, including those relating to its defined benefit pension schemes, as these fall due under both normal and stressed conditions without incurring unacceptable costs or risking damage to its reputation.defined benefit pension schemesthe reshaped sse group features an increasing number of significant joint ventures (operated and non-operated) both in the uk and ireland and in other carefully selected geographic locations. sse must ensure that joint venture structures, governance and operations are robust in order to protect the investments made.carefully selected geographic locationsthe risk associated with the group’s exposure to fluctuations in both the physical volumes and price of key commodities, including electricity, gas, co2 permits, oil and related foreign exchange values.price of key commodities

Risk Factors Full Breakdown - Total Risks 12

Debt & Financing1 | 8.3%
  • Debt & Financing - Risk 1
    The risk that funding is not available to meet SSE’s financial liabilities, including those relating to its defined benefit pension schemes, as these fall due under both normal and stressed conditions without incurring unacceptable costs or risking damage to its reputation.

    Material influencing factors: • Ongoing commitment to an Investment Grade credit rating. Material influencing factors most impacted by coronavirus: • Global macro-economic changes and subsequent volatility in foreign exchange markets. • Fluctuations in interest rates and inflation which influence borrowing costs. • Defined benefit pension scheme performance including the impact of fluctuations in gilt yields on the value of scheme liabilities. Key developments: • Proceeds in the region of £1.5bn have been announced towards the £2bn planned disposal programme target set in June 2020. Key developments associated with coronavirus: • In spite of the impact on the macro economy caused by the pandemic, in March 2021 SSE issued its fourth Green bond in 5 years with the issuance of a dual tranche £500m Eurobond. SSE is the UK’s largest corporate issuer of green bonds and is the only UK corporate to launch multiple green bonds. During the year SSE also set out a new framework for issuing innovative sustainability-linked bonds in the future. Key mitigations: • Policy Link: SSE Financial Management Policy. • Committed borrowings and facilities are available at all times equal to at least 105% of forecast borrowings over a rolling 6 month period. • SSE seeks to maintain a diverse and innovative portfolio of debt to avoid over-reliance on any one market. This allows it to build relationships with, and create competition between, debt providers. • Each of SSE’s defined benefit pension schemes has a Board of Trustees which acts independently of the Group.

Corporate Activity and Growth4 | 33.3%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.