Jersey Electricity Regulatory News (JEL)

19 May 2005 07:00

Jersey Electricity Company Limited19 May 2005 The Jersey Electricity Company Preliminary announcement of Interim Results for the six months ended 31 March 2005 At a meeting of the Board of Directors held on 18 May 2005, the Board approvedthe Interim Accounts for the Group for the six months ended 31 March 2005 anddeclared an interim dividend of 50p gross (40p net of tax) compared to 45pgross (36p net) in 2004 on the Ordinary and 'A' Ordinary shares. The dividendwill be paid on 26 August 2005 to those shareholders registered in the books ofthe Company on 12 August 2005. The Interim Accounts for 2005 have not been audited nor have the results for theequivalent period in 2004. The results for the year ended 30 September 2004 havebeen extracted from the statutory accounts for that period which had anunqualified audit option. P.J. Routier Company Secretary Direct telephone number : 01534 505253 Direct fax number : 01534 505515 Email : proutier@jec.co.uk 19 May 2005 The Powerhouse, PO Box 45, Queens Road, St Helier, Jersey JE4 8NY Directors' Statement Financial Summary 6 months 6 months % rise 2005 2004Electricity Sales -kWh (000) 338,465 334,099 1%Turnover £31.2m £30.9m 1%Profit before tax £5.6m £4.7m* 21%Earnings per share £2.84 £2.26* 26%Gross dividend per ordinary share 50p 45p 11% * pre-exceptional costs Group profit before exceptional costs was 21% higher in the first half of 2005,compared with the same period last year, despite profit growth of only 5% in ourcore electricity business, which remained affected by increased costs and ourdecisions in recent years to freeze electricity tariffs. We increased ourelectricity prices on 1 January 2005 for the first time in four years and thiscombined with continuing growth in electricity sales, offset some increases inthe cost of imported electricity caused by the weakness of Sterling against theEuro. Our customers continue to be sheltered from dramatically rising wholesaleprices in the European electricity market and on average pay 15% less thanContinental electricity users as a result of our ostensibly fixed price, threeyear contract for imported power, which expires later this year. Power importation increased slightly to represent 97% of our requirements duringthe half-year. Our indigenous power generating plant provided the balance of theelectricity which we supplied and in addition to its principal role as emergencystandby capacity, it enabled us to make modest but unprecedented gains, from theoccasional trading of power in the French electricity market. Profits from our property portfolio remained unchanged at £0.6m reflecting itsrelatively mature status. Our Building Services business produced a £0.1mprofit in the six month period being at a similar level to last year. OurElectrical Retailing business remained affected by the difficult tradingconditions which prevail in this sector with year-on-year turnover down 2% butprofits were maintained at a similar level to 2004 at £0.1m. Start-up losses at our joint venture data centre company Foreshore Limited fell30% to £0.2m on sales up by 65% to £1.1m in the half-year. Losses in ourassociate telecoms business Newtel were zero this year, compared to losses of£0.4m last year, as our investment was written off in the last financial yearand in October 2004 we exited from our marginally loss-making telephoneequipment business, JET. Our IT consultancy Jendev, improved profits in theperiod and our consultancy Jersey Energy, continues to remain profitable. Ourcontinental telecommunications network provided a new income stream from theleasing of fibre optic cables to local telecom operators. The cash in bank rose from £2.9m to £7.3m during the last six months, withoperating cash produced from trading activity offset by £2.4m of capitalexpenditure and £0.9m of dividends. Looking ahead, the most strategically significant issue facing the Companyremains the renegotiation of its European power importation contract whichexpires on 1 December 2005. As indicated in our last Annual Report, we will beexposed to market prices which are presently more than 35% higher than those wecurrently enjoy. Negotiations with suppliers are continuing and our riskmitigation strategies are being refined with the assistance of energy marketspecialists. It will be necessary to pass through to customers, those increased costs whichwe cannot absorb and we anticipate that whilst our core electricity businesswill remain impacted by cost pressures, good cash flow and strengthening Groupprofitability, will enable satisfactory dividend returns for the foreseeablefuture. Your Board proposes to pay an interim gross dividend of 50p (2004: 45p)on the Ordinary and "A" Ordinary Shares payable on 26 August 2005. D.R. MALTWOOD - Chairman M.J.LISTON - Chief Executive 19 May 2005 THE JERSEY ELECTRICITY COMPANY LIMITED Consolidated Profit and Loss Account 6 months ended 6 months ended 12 months ended 31 March 2005 31 March 2004 30 September 2004 Notes £ 000 £ 000 £ 000Turnover:Group and share of joint venture 2 31,161 30,915 57,684Less: Share of joint venture turnover (572) (347) (771) Group turnover 30,589 30,568 56,913 Cost of sales (17,268) (17,613) (32,039) Gross profit 13,321 12,955 24,874Net operating expenses (7,627) (7,529) (16,808) Group operating profit 5,694 5,426 8,066Share of operating loss in joint venture (173) (247) (517)Share of associate's operating loss - (417) (417) Exceptional item - impairment of investment - (1,521) (1,545) Profit on ordinary activities before interest 2 5,521 3,241 5,587and taxation Net interest 122 (90) (101) Profit on ordinary activities before taxation 5,643 3,151 5,486 Tax on profit on ordinary activities (1,273) (1,191) (1,759) Profit on ordinary activities after taxation 4,370 1,960 3,727 Minority interest (16) (14) (42) Profit on ordinary activities after taxation 4,354 1,946 3,685and minority interest Dividends paid and proposed (613) (552) (1,418) Retained profit for the Group and share in 3,741 1,394 2,267joint venture Earnings per ordinary share (basic and diluted) £2.84 £1.27 £2.40 Earnings per ordinary share (basic and diluted)excluding exceptional items £2.84 £2.26 £3.41 THE JERSEY ELECTRICITY COMPANY LIMITED Consolidated Balance Sheet 31 March 2005 31 March 2004 30 September 2004 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000Fixed assetsIntangible fixed assets - 121 100Tangible fixed assets 124,667 119,049 126,183Investments:Shares 5 5 5Joint venture share of gross assets 685 503 542Joint venture share of gross liabilities - (81) (120)Net share of joint venture assets 685 422 422 125,357 119,597 126,710 Current assets 26,880 19,897 21,948 Current liabilities (8,472) (12,315) (10,678) Net current assets 18,408 7,582 11,270 Total assets less current liabilities 143,765 127,179 137,980 Creditors falling due after more than one (13,274)year (1,698) (11,387)Pensions and similar obligations (462) (538) (487)Deferred taxation (11,528) (11,049) (11,346) Less non-current liabilities (25,264) (13,285) (23,220) 118,501 113,894 114,760 Capital and reserves Called up share capital 1,767 1,767 1,767Reserves - equity 116,686 112,043 112,949 Shareholders' funds 118,453 113,810 114,716 Equity - minority interest 48 84 44 118,501 113,894 114,760 THE JERSEY ELECTRICITY COMPANY LIMITED Consolidated Cash Flow Statement 6 months ended 6 months ended 12 months ended 31 March 2005 31 March 2004 30 September 2004 £000 £ 000 £ 000Reconciliation of operating profit to net cash inflow fromoperating activities Group operating profit 5,694 5,426 8,066Depreciation and amortisation charges 3,798 3,697 7,793(Increase)/decrease in stocks and work in progress (171) 100 377(Increase)/decrease in debtors (308) 234 (24)(Decrease) /increase in creditors (1,001) (1,744) 1,077 Net cash inflow from operating activities 8,012 7,713 17,289 Net interest 122 (90) (101)Taxation - - (336)Capital expenditure (2,370) (3,791) (6,524)Other investments (438) (1,245) (1,685)Dividends paid (874) (617) (1,243) Increase in cash 4,452 1,970 7,400 Reconciliation of net cashflow Change in cash 4,452 1,970 7,400Net funds/(debt) at beginning of period 2,890 (4,510) (4,510) Net funds/(debt) at end of period 7,342 (2,540) 2,890 THE JERSEY ELECTRICITY COMPANY LIMITED Notes to the Financial Statements for the period ended 31 March 2005 1. Basis of preparation The unaudited interim accounts have been prepared on the basis of the accountingpolicies set out in the Notes to the Financial Statements for the Group for the year ended 30 September 2004. 2. Turnover and profit The contributions of the various activities of the Group to turnover and profitare listed below: Turnover Profit/(loss) before interest and tax £ 000 £ 000 £ 000 £ 000 £ 000 £ 000 6 months to 6 months to 12 months to 6 months to 6 months to 12 months to Notes 31 Mar 2005 31 Mar 2004 30 Sept 2004 31 Mar 2005 31 Mar 2004 30 Sept 2004Energy 24,602 24,103 43,232 4,837 4,625 6,549Building Services 1,174 1,217 3,712 57 127 154Retail Appliance Sales 2,953 3,026 5,351 70 114 106Property 1,032 996 2,010 558 548 1,107Others 1,400 1,573 3,379 (1) (652) (784) 31,161 30,915 57,684 5,521 4,762 7,132Exceptional item: 3 Impairment ofinvestment inassociate - (1,521) (1,545) 5,521 3,241 5,230 The information currently available to report the net assets of each businessclass as each reportable segment is limited as each business operates as adivision of the Group and therefore in certain instances there is no reasonablebasis to allocate the Group net assets to each business class. On a geographicalbasis, the Group's material operations are conducted within the Channel Islandsarea. 3. Exceptional item - Impairment of investment in associate In the last financial year the exceptional item in the 6 months to 31 March 2004and the 12 months to 30 September 2004 related to the write-down of the Groupinvestment in our associate Newtel Holdings Limited. This information is provided by RNS The company news service from the London Stock Exchange