Jersey Electricity Regulatory News (JEL)

RNS Number : 9075L

Jersey Electricity Company Ld

14 May 2010

 

 

 

Jersey Electricity plc

 Interim Management Report

for the six months ended 31 March 2010

 

 

At a meeting of the Board of Directors held on 13 May 2010, the Board approved the Interim Management Report for the Group for the six months ended 31 March 2010 and declared an interim dividend of 81p (101.25p gross) compared to 77p (96.25p gross) in 2009 on the Ordinary and 'A' Ordinary shares. The dividend will be paid on 30 June 2010 to those shareholders registered in the books of the Company on 11 June 2010.

 

The Interim Management Report is attached and will be available to the public on the Company's website www.jec.co.uk.

 

The Interim Management Report for 2010 has not been audited or reviewed by our external auditors nor have the results for the equivalent period in 2009. The results for the year ended 30 September 2009 have been extracted from the statutory accounts which had an unqualified audit opinion.

P.J. Routier

Company Secretary

 

Direct telephone number : 01534 505253

Direct fax number : 01534 505515

Email : proutier@jec.co.uk

 

13 May 2010

 

 

 

The Powerhouse,

PO Box 45,

Queens Road,

St Helier,

Jersey JE4 8NY

 

 

 

 

 

 

 

Jersey Electricity plc

Unaudited Interim Management Report

for the six months to 31 March 2010

 

Financial Summary	6 months 2010	6 months 2009 (restated)	% increase/(decrease)
Electricity Sales -kWh (000)	366,628	367,112	-
Turnover	£55.7m	£49.9m	12 %
Profit before tax	£7.5m	£5.6m	34%
Profit in Energy business	£4.4m	£4.0m	10%
Earnings per share	£3.92	£2.93	34%
Net dividend proposed per ordinary share	81p	77p	5%

 

Group turnover was 12% higher than 2009 and profit before tax in the first half of 2010 was £7.5m being 34% higher than in the same period last year. Most of this increase in profits came from our non-Energy business units. Earnings per share rose by 34% in line with profits.

 

Electricity revenues in the first half of 2010 were 8% higher than in 2009. Unit sales volumes were at the same level as last year but revenues increased by the net result of increased tariffs in the last financial year offset by a 5.1% decrease in prices to our customers from January 2010. Energy profits rose from £4.0m in 2009 to £4.4m mainly as a result of lower maintenance costs. Imported electricity met 89% of our requirements during the half year, which was slightly lower than in the previous year.

 

Despite the tough trading conditions currently prevailing in markets our Retailing business saw year on year revenues rise 12% to £7.6m and profits increase by £0.1m to £0.4m. Profits from our Property portfolio rose by £0.6m to £1.2m due to an increase in rental flows and the settlement of a rent review with one of our tenants back-dated to June 2008. The Building Services business produced profits of £0.1m being at the same level as last year. Our remaining business units produced profits of £1.3m which included £1m received from our associate Newtel for fibre optic lease rentals and the part repayment of a loan written off in 2004 when the investment value was reduced to zero. These additional revenues are largely non-recurring and were associated with the distribution of funds raised by Newtel from the sale of its data centre assets in Guernsey. Interest received at £0.2m was £0.2m lower than last year due mainly to lower interest rates.

 

Cash, including short-term investments, rose £1.4m to £18.2m during the last six months, with operating cash produced from trading activity offset by £2.4m of electricity infrastructure investment. In terms of capital expenditure, the Western Primary project to reinforce the network in the west of Jersey was completed during this period and the South Hill Primary project was initiated.

 

Your Board proposes to pay an interim net dividend of 81p (2009: 77p) on the Ordinary and "A" Ordinary Shares payable on 30 June 2010 in addition to the final dividend for 2009 of 118p (2008: 112p) paid on 31 March 2010. Your Board aims to deliver sustained real growth each year and the proposed interim dividend is a 5% year on year increase.

 

At our Annual General Meeting, Chris Evans, a non-executive director who joined the Board in 1998, retired and the Board would like to thank him for all his help during the last 12 years.

 

 

Responsibility statement

 

We confirm to the best of our knowledge:

 

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting':

(b) the Interim Management Report includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c) the Interim Management Report includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.8R (disclosure of related party transactions and changes therein).

(d) This half yearly financial report contains certain forward-looking statements with respect to the operations, performance and financial condition of the Company. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this half yearly financial report and the Company undertakes no obligation to update these forward-looking statements. Nothing in this half yearly financial report should be construed as a profit forecast.

 

G.J. GRIME - Chairman C.J.AMBLER - Chief Executive 13 May 2010

 

 

 

 

INVESTOR TIMETABLE FOR 2010

 

11 June	Record date for interim ordinary dividend
30 June	Interim ordinary dividend for year ending 30 September 2010
1 July	Payment date for preference share dividends
End July	Interim Management Statement - nine months to 30 June 2010
17 December	Preliminary announcement of full year results

 

 

Condensed Consolidated Income Statement (Unaudited)

 

			Six months ended 31 March				Year ended 30 September
	Note		2010 £000		2009 £000		2009 £000
					(restated)
Revenue	2		55,706		49,897		93,594
Cost of sales			(39,713)		(35,214)		(66,903)
Gross profit			15,993		14,683		26,691
Revaluation of investment properties			-		-		(106)
Operating expenses			(8,661)		(9,456)		(17,818)
Operating profit before joint venture			7,332		5,227		8,767
Share of profit/(loss) of joint venture			30		(11)		(59)
Operating profit	2		7,362		5,216		8,708
Interest receivable			166		405		577
Finance costs			(7)		(5)		(11)
Profit from operations before taxation			7,521		5,616		9,274
Taxation	3		(1,490)		(1,125)		(2,032)
Profit from operations after taxation			6,031		4,491		7,242
Minority interest			(31)		-		(38)
Profit for the period attributable to the equity holders of the parent company			6,000		4,491		7,204
EARNINGS PER SHARE
- basic and diluted			£3.92		£2.93		£4.70
DIVIDENDS PER SHARE
- paid	4		£1.18		£1.12		£1.89
- proposed	4		£0.81		£0.80		£1.18

 

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

 

			Six months ended 31 March				Year ended 30 September
			2010 £000		2009 £000		2009 £000
Profit for the period			6,000		4,491		7,204
Other comprehensive income
Actuarial gain/(loss) on defined benefit scheme (net of tax)			3,565		(8,178)		(9,163)
Fair value gain/(loss) on cash flow hedges (net of tax)			(994)		1,906		(830)
Total comprehensive income for the period			8,571		(1,781)		(2,789)
Attributable to:
Owners of the company			8,602		(1,781)		(2,751)
Minority Interest			(31)		-		(38)
			8,571		(1,781)		(2,789)

 

Condensed Consolidated Statement of Changes in Equity (Unaudited)

 

 

	Share	Other	Retained	Total
	capital	reserves	earnings	reserves
	£000	£000	£000	£000
At 1 October 2009	1,532	1,726	126,074	129,332
Total recognised income and expense for the period	-	-	6,000	6,000
Unrealised losses on hedges	-	(994)	-	(994)
Actuarial gain on defined benefit scheme	-	-	3,565	3,565
Equity dividends paid by Jersey Electricity plc	-	-	(1,808)	(1,808)
As at 31 March 2010	1,532	732	133,831	136,095
At 1 October 2008	1,532	2,556	130,928	135,016
Total recognised income and expense for the year	-	-	7,204	7,204
Unrealised losses on hedges	-	(830)	-	(830)
Actuarial loss on defined benefit scheme	-	-	(9,163)	(9,163)
Equity dividends paid by Jersey Electricity plc	-	-	(2,895)	(2,895)
As at 30 September 2009	1,532	1,726	126,074	129,332
			(restated)	(restated)
At 1 October 2008	1,532	2,556	130,928	135,016
Total recognised income and expense for the period	-	-	4,491	4,491
Unrealised gains on hedges	-	1,906	-	1,906
Actuarial loss on defined benefit scheme		-	(8,178)	(8,178)
Equity dividends paid by Jersey Electricity plc	-	-	(1,716)	(1,716)
As at 31 March 2009	1,532	4,462	125,525	131,519

 

 

Condensed Consolidated Balance Sheet (Unaudited)

 

			As at 31 March				As at 30 September
			2010 £000		2009 £000		2009 £000
NON-CURRENT ASSETS					(restated)
Intangible assets			60		84		60
Property, plant and equipment			119,399		119,723		120,581
Investment property			12,635		12,635		12,529
Retirement benefit surplus			1,426		-		-
Other investments			1,803		1,907		1,804
Total non-current assets			135,323		134,349		134,974
CURRENT ASSETS
Inventories			7,026		5,813		6,069
Trade and other receivables			18,560		17,127		14,871
Derivative financial instruments			357		5,019		1,599
Short-term investments - cash deposits			9,980		5,585		8,200
Cash and cash equivalents			8,263		6,398		8,636
Total current assets			44,186		39,942		39,375
TOTAL ASSETS			179,509		174,291		174,349
CURRENT LIABILITIES
Trade and other payables			13,244		11,962		13,858
Current tax payable			3,188		2,150		1,698
Total current liabilities			16,432		14,112		15,556
NET CURRENT ASSETS			27,754		25,830		23,819
NON-CURRENT LIABILITIES
Trade and other payables			15,264		14,216		14,676
Retirement benefit deficit			-		2,780		3,708
Financial liabilities - preference shares			235		235		235
Deferred tax liabilities			11,450		11,422		10,827
Total non-current liabilities			26,949		28,653		29,446
TOTAL LIABILITIES			43,381		42,765		45,002
NET ASSETS			136,128		131,526		129,347
EQUITY
Share capital			1,532		1,532		1,532
Other reserves			446		5,019		1,726
Retained earnings			134,117		124,968		126,074
Shareholders' funds			136,095		131,519		129,332
Minority interest			33		7		15
TOTAL EQUITY			136,128		131,526		129,347

 

 

 

Condensed Consolidated Cash Flow Statement (Unaudited)

 

		Six months ended 31 March				Year ended 30 September
	Note	2010 £000		2009 £000		2009 £000
CASH FLOWS FROM OPERATING ACTIVITIES				(restated)
Operating profit before joint venture		7,332		5,227		8,767
Depreciation and amortisation charges		3,873		3,705		7,828
Revaluation of investment property		-		-		106
Pension operating charge less contributions paid		(700)		(585)		(1,039)
(Profit)/loss on sale of fixed assets		(3)		-		24
Operating cash flows before movement in working capital		10,502		8,347		15,686
(Increase)/decrease in inventories		(956)		289		33
(Increase)/decrease in trade and other receivables		(3,552)		(4,896)		(2,841)
Increase in trade and other payables		827		1,490		2,950
Interest received		31		314		690
Preference dividends paid		(4)		(4)		(9)
Income taxes paid		-		-		(933)
Net cash flows from operating activities		6,845		5,540		15,576
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(3,627)		(8,175)		(12,066)
Investment in intangible assets		(29)		(8)		(29)
Proceeds from disposal of property		-		-		16
Repayment of long-term loan		50		100		150
Short-term investments		(1,780)		5,440		2,825
Net cash flows from investing activities		(5,386)		(2,643)		(9,104)
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid	4	(1,832)		(1,716)		(2,907)
Net cash flows used in financing activities		(1,832)		(1,716)		(2,907)
Net increase in cash and cash equivalents		(373)		1,181		3,565
Cash and cash equivalents at beginning of period		8,636		5,217		5,071
Cash and cash equivalents at end of period		8,263		6,398		8,636

 

Notes to the Condensed Interim Accounts

 

1. Accounting policies

 

Basis of preparation

The interim accounts for the six months ended 31 March 2010 have been prepared on the basis of the accounting policies set out in the 30 September 2009 annual report and accounts using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with IAS 34 'Interim Financial Reporting'.

 

The Group has considerable financial resources and, as a consequence, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 

2. Turnover and profit

 

The contributions of the various activities of the Group to turnover and profit are listed below:

Six months ended Year ended

	31 March 2010			31 March 2009 (restated)			30 September 2009
	External	Internal	Total	External	Internal	Total	External	Internal	Total
Revenue	£000	£000	£000	£000	£000	£000	£000	£000	£000
Energy	42,589	121	42,710	39,358	126	39,484	73,123	267	73,390
Building services	1,908	107	2,015	1,881	63	1,944	3,569	184	3,753
Retail	7,648	24	7,672	6,856	32	6,888	12,954	60	13,014
Property	1,519	348	1,867	898	344	1,242	1,840	691	2,531
Other	2,042	313	2,355	904	313	1,217	2,108	574	2,682
	55,706	913	56,619	49,897	878	50,775	93,594	1,776	95,370
Inter Group elimination			(913)			(878)			(1,776)
			55,706			49,897			93,594
Operating profit
Energy			4,400			3,992			6,679
Building services			129			139			176
Retail			383			279			292
Property			1,181			620			1,263
Other			1,269			186			404
Operating profit before property revaluation			7,362			5,216			8,814
Revaluation of investment properties			-			-			(106)
Operating profit			7,362			5,216			8,708

 

Materially, all the Group's operations are conducted within the Channel Islands. All transfers between divisions are at an arm's-length basis.

 

No segmental detail for assets or liabilities has been provided as there has been no material movement from

the detail provided in the annual accounts to the 30 September 2009.

 

 

 

Notes to the Condensed Interim Accounts (Unaudited)

 

 

3. Income tax

	Six months ended 31 March				Year ended 30 September
	2010 £000		2009 £000		2009 £000
			(restated)
Current income tax	(1,490)		(806)		(1,237)
Deferred income tax	-		(320)		(795)
Total income tax	(1,490)		(1,126)		(2,032)

 

With effect from the 2009 year of assessment the standard rate of income tax for Jersey companies changed. For the period ended 31 March 2010 and subsequent periods, the company is taxable at the rate applicable to utility companies of 20%.

 

 

4. Dividends

 

	Six months ended 31 March				Year ended 30 September
	2010 £000		2009 £000		2009 £000
Distributions to equity holders and by subsidiaries in the period	1,832		1,716		2,907

 

The distribution to equity holders in the period consisted of £ 1,807,760 (118p net of tax per share) in respect of the final dividend for 2009. In addition £24,000 was paid by subsidiaries to minority interests for the six months to 31 March 2010.

 

The Directors have declared an interim dividend of 81p per share, net of tax (2009 - 77p) for the six months ended 31 March 2010 to shareholders on the register at the close of business on 11 June 2010. This dividend was approved by the Board on 13 May 2010 and has not been included as a liability at 31 March 2010.

 

 

 

5. Pensions

 

In consultation with the independent actuaries to the scheme, the valuation of the pension scheme assets and liabilities has been updated to reflect current market discount rates, current market values of investments and actual investment returns applicable under IAS 19 'Employee Benefits', and also consideration given as to whether there have been any other events that would significantly affect the pension liabilities. The triennial actuarial valuation of the defined benefits scheme as at 31 December 2009 is currently being finalised which will dictate the applicable future required cash contributions.

 

 

 

Notes to the Condensed Interim Accounts

 

 

6. Related party transactions

 

a) The Company currently leases the La Collette Power Station site from its largest shareholder, the States of Jersey, for a peppercorn rent of £1,000 per annum. This lease was subject to a rent review as at June 2006 and the Company is in dispute with its landlord. The information usually required by IAS 37 Provisions, 'Contingent liabilities and contingent assets', is not disclosed on the grounds that it may prejudice the outcome of the dispute.

 

b) The Company made electricity sales to the value of £3.8m (2009: £3.6m) and other sales of £0.8m (2009: £0.3m) to the States of Jersey for the six months ended 31 March 2010. At the half-year end the States of Jersey had a debtors balance of £132,000 (2009: £243,000). The States of Jersey made sales to the value of £0.2m (2009:£0.1m) to Jersey Electricity for the six months ended 31 March 2010. In addition to the transactions included above with the States of Jersey, the Company regularly makes payments of income tax, social security, GST (Goods and Services Tax) and other statutory costs.

 

c) At the half-year end Foreshore Limited had a debtors balance of £119,000 (2009: £152,000). The long-term loan balance at 31 March 2010 was £550,000 (2009: £650,000) repayable to Jersey Electricity on a 'cash available' basis. During the six months to 31 March 2010 the Company made electricity sales of £284,000 (2009: £245,000) and other sales of £366,000 (2009: £382,000) to Foreshore Limited.

 

d) The Company has a 34% shareholding in Newtel Holdings Limited ("Newtel"). During the six months to 31 March 2010 the Company made electricity sales of £16,000 (2009: £14,000) and received other income of £1,033,000 (2009: £25,000) to Newtel. Newtel had sales of £2,000 (2009: £1,000) to the Company for the six months ended 31 March 2010.

 

 

7. Prior year Adjustment - Energy Revenues

 

In the Annual Report for 2009 it was disclosed that a refinement had been made to the methodology employed to calculate the total number and values of unbilled units of electricity disclosed in our financial statements. For consistency, the Interim Report figures for 2009 have been restated to reflect this change. The impact is an increase in the Energy revenues (and profit) in the Income Statement of £0.3m and the net assets in the Balance Sheet by £2m.

 

 

 

 

 

 

 

 

This information is provided by RNS

The company news service from the London Stock Exchange