Scottish & Southern profits rise

By John Bowker

LONDON (Reuters) - Power supplier Scottish & Southern Energy (SSE.L) posted a 13.9 percent rise in annual profit to 1.23 billion pounds on Thursday, and said prices for households were still likely to rise soon.

The Perth-based company, which supplies gas and electricity to nearly 8.5 million customers in Scotland and the south of England, said the soaring oil price was putting pressure on margins at its retail business.

"We have no plans today to increase prices, but if the wholesale environment stays as it is we cannot defy gravity," Chief Executive Ian Marchant told reporters, adding that the firm still hoped to be "the last, or one of the last" to go through with a price hike.

"I can see oil dropping from $129 a barrel, but I can't see it reaching $90 -- the level that brought around the last round of price rises," he said.

Centrica (CNA.L), owner of the biggest supplier, British Gas, said earlier this month it would not be afraid to raise prices to maintain margins at its retail business.

As for SSE's double-digit rise in profits, Marchant said there was no single factor -- although a 700,000 increase in customers was one. "We are confident we can breach the 9 million mark this year," he said.

"The company is fairly transparent ... The main concern is where supply margins are going .. There may be price increases later in the year," said JP Morgan analyst Chris Rogers.

Marchant confirmed that SSE was not bidding for nuclear power operator British Energy BGY.L -- currently the target for a number of European utilities led by France's EDF (EDF.PA).