Jersey Electricity Regulatory News (JEL)

17 May 2007 07:01

Jersey Electricity Company Limited17 May 2007 The Jersey Electricity Company Preliminary Announcement of Interim Results for the six months ended 31 March 2007 At a meeting of the Board of Directors held on 16 May 2007, the Board approvedthe Interim Accounts for the Group for the six months ended 31 March 2007 anddeclared an interim dividend of 61.25p gross (49p net of tax) compared to 55pgross (44p net) in 2006 on the Ordinary and 'A' Ordinary shares. The dividendwill be paid on 31 August 2007 to those shareholders registered in the books ofthe Company on 17 August 2007. The Interim Accounts are attached and will be sent to all shareholders in duecourse, following which, copies will be made available to the public at theCompany's registered office, Queens Road, St Helier, Jersey, JE4 8NY. The Interim Accounts for 2007 have not been audited nor have the results for theequivalent period in 2006. The results for the year ended 30 September 2006 havebeen extracted from the statutory accounts for that period which had anunqualified audit opinion. P.J. RoutierCompany Secretary Direct telephone number : 01534 505253Direct fax number : 01534 505515Email : proutier@jec.co.uk 17 May 2007 The Powerhouse,PO Box 45,Queens Road,St Helier,Jersey JE4 8NY Jersey Electricity Company Limited Unaudited interim results for the six months to 31 March 2007 Financial Summary 6 months 6 months % increase/ 2007 2006 (decrease)Electricity Sales -kWh (000) 335,986 355,949 (6)%Turnover £40.0m £35.8m 12%Profit before tax £4.9m £5.1m (5)%Profit in Energy business £3.0m £3.9m (23)%Earnings per share £2.84 £2.55 11%Net dividend proposed per ordinary share 49p 44p 11% Group profit before tax in the first half of 2007 was £4.9m being 5% lower thanin the same period last year, despite a 12% increase in turnover. This wasprincipally due to a lower level of electricity sales and our decision toabsorb, rather than pass on to customers, some of the increased cost of powerimported from Europe. Our earnings per share rose by 11% due to a reduction inthe effective tax rate for the 2007 and 2008 financial years. Note 3 to theInterim Accounts explains the rationale for this tax change. Power prices to ourcustomers were increased by an average just above 19% from 1 January 2007.Having hedged our position in the forward power markets, we were able to pledgethat prices would remain unchanged for at least two years. Our aim remains to restore during the 2008 financial year, the profitabilityupon which planned investment in the continuing reliability of our electricitynetwork depends. Unit sales in the first half of 2007 were 6% lower than in 2006 due to milderweather experienced throughout Europe, offset by continuing strong growth fromour dominant share of the new energy market presented by Jersey's ongoingproperty development boom. Imported electricity met 82% of our requirementsduring the half year, which was lower than normal because we took advantage oflower oil prices in the global marketplace to generate locally during peakperiods when import costs are at their highest. Our Retailing business continued last year's trend of strong growth, withyear-on-year turnover rising 40% and profits moving up from £0.3m to £0.4m.Profits from our Property portfolio rose from £0.4m to £0.7m due mainly to thesale of a residential property used previously to house employees, for a capitalgain of £0.3m. The Building Services business produced an increase in turnoverof 12% with profits up slightly at £0.2m. Losses at our data centre jointventure, Foreshore Limited, reduced to £0.1m with turnover up 40% against lastyear. Our consultancy businesses Jersey Energy and Jendev produced profitsslightly up at £0.1m. Cash at bank, including short-term investments, fell £1.1m to £14.0m during thelast six months, with operating cash produced from trading activity offset by£3.5m of capital investment expenditure and the £1.1m final 2006 dividend. Your Board proposes to pay an interim net dividend of 49p (2006: 44p) on theOrdinary and "A" Ordinary Shares payable on 31 August 2007 in addition to thefinal dividend for 2006 of 68p (2005: 62p) paid on 30 March 2007. D.R. MALTWOOD - Chairman M.J.LISTON - Chief Executive 17 May 2007 INVESTOR TIMETABLE FOR 2007 17 May Announcement of interim results30 June Payment date for preference share dividends17 August Record date for interim ordinary dividend31 August Interim ordinary dividend for year ending 30 September 200713 December Preliminary announcement of full year results Group Income Statement (Unaudited) Six months ended Year ended 31 March 30 September 2007 2006 2006 Note £000 £000 £000 Revenue 2 40,048 35,759 65,617 Cost of sales (27,268) (22,812) (42,873) Gross profit 12,780 12,947 22,744 Revaluation of investment properties - - 1,219Operating expenses (8,195) (8,095) (17,107) Group operating profit before joint venture 4,585 4,852 6,856Share of loss of joint venture (116) (169) (343) Group operating profit 2 4,469 4,683 6,513 Interest receivable 413 452 818Finance costs (5) (4) (9) Profit from operations before taxation 4,877 5,131 7,322 Taxation 3 (519) (1,219) (1,351) Profit from operations after taxation 4,358 3,912 5,971 Minority interest (2) (5) (29) Profit for the period attributable to the equityholders of the parent company 4,356 3,907 5,942 EARNINGS PER SHARE - basic and diluted £2.84 £2.55 £3.88 DIVIDENDS PER SHARE - paid final/interim 4 £0.68 £0.62 £1.06 - paid special 4 - £4.44 £4.44 - proposed 4 £0.49 £0.44 £0.68 Group Statement of Recognised Income and Expense (Unaudited) Six months ended Year ended 30 September 31 March 2007 2006 2006 £000 £000 £000Profit for the financial period 4,356 3,907 5,942Actuarial gain on defined benefit scheme (net of tax) - - 2,910Fair value gain/(loss) on cash flow hedges 361 546 (570) Total recognised income and expense for the period attributableto the equity holders of the parent 4,717 4,453 8,282 Group Balance Sheet (Unaudited) As at 31 March As at 30 September Note 2007 2006 2006 £000 £000 £000NON-CURRENT ASSETSIntangible assets 117 92 131Property, plant and equipment 107,783 108,521 108,289Investment property 10,990 9,753 10,990Other investments 2,031 935 1,884 Total non-current assets 120,921 119,301 121,294 CURRENT ASSETSInventories 4,228 3,505 4,196Trade and other receivables 17,226 11,747 13,046Derivative financial instruments - 18 -Short-term investments - cash deposits - 1,500 3,765Cash and cash equivalents 14,026 11,641 11,346 Total current assets 35,480 28,411 32,353 Total assets 156,401 147,712 153,647 LIABILITIESTrade and other payables 8,803 7,792 9,590Derivative financial instruments 737 - 1,098Current tax payable 1,173 1,195 1,190 Total current liabilities 10,713 8,987 11,878 NON-CURRENT LIABILITIESTrade and other payables 12,905 13,680 13,245Tax liabilities 1,305 1,219 813Financial liabilities - preference shares 235 235 235Retirement benefit obligations - 299 -Deferred tax liabilities 11,833 10,705 11,734 Total non-current liabilities 26,278 26,138 26,027 Total liabilities 36,991 35,125 37,905 Net assets 119,410 112,587 115,742 EQUITYShare capital 1,532 1,532 1,532Other reserves (737) 18 (1,098)Retained earnings 118,588 111,003 115,274 Shareholders' funds 5 119,383 112,553 115,708 Minority interest 27 34 34 Total equity 119,410 112,587 115,742 Group Cash Flow Statement (Unaudited) Six months ended Year ended 31 March 30 September Restated Note 2007 2006 2006 £000 £000 £000CASH FLOWS FROM OPERATING ACTIVITIES Group operating profit before joint venture 4,585 4,852 6,856 Depreciation and amortisation charges 3,544 3,505 6,948Revaluation of investment property - - (1,219)Pension operating charge less contributions paid (391) (324) (877) Profit on sale of fixed assets (309) - - Operating cash flows before movement in working capital 7,429 8,033 11,708 (Increase)/decrease in inventories (32) 423 (269)(Increase) in trade and other receivables (3,813) (3,767) (2,515)(Decrease)/increase in trade and other payables (577) 1,017 3,387 Interest received 420 423 756 Preference dividends paid (4) (4) (9) Income taxes paid - - (1,233) Net cash flows from operating activities 3,423 6,125 11,825 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (3,506) (2,290) (4,995)Investment in intangible assets (7) - (76)Proceeds from disposal of property 318 6,550 6,550Investment in joint venture (263) (350) (613)Short-term investments 3,765 (1,500) (3,765) Net cash flows from investing activities 307 2,410 (2,899) CASH FLOWS FROM FINANCING ACTIVITIES Equity dividends paid 4 (1,050) (7,764) (8,450) Net cash flows used in financing activities (1,050) (7,764) (8,450) Net increase in cash and cash equivalents 2,680 771 476Cash and cash equivalents at beginning of period 11,346 10,870 10,870 Cash and cash equivalents at end of period 14,026 11,641 11,346 Notes to the Interim Accounts 1. Accounting policies Basis of preparation The interim accounts for the six months ended 31 March 2007 have been preparedon the basis of the accounting policies set out in the 30 September 2006 annualreport and accounts. 2. Turnover and profit The contributions of the various activities of the Group to turnover and profitare listed below: 31 March 2007 31 March 2006 30 September 2006 External Internal Total External Internal Total External Internal TotalRevenue £000 £000 £000 £000 £000 £000 £000 £000 £000 Energy 30,510 130 30,640 28,006 93 28,099 50,391 216 50,607Building services 1,731 98 1,829 1,544 65 1,609 3,111 188 3,299Retail 6,359 18 6,377 4,528 15 4,543 8,772 46 8,818Property 745 340 1,085 789 154 943 1,556 286 1,842Other 703 453 1,156 892 297 1,189 1,787 701 2,488 40,048 1,039 41,087 35,759 624 36,383 65,617 1,437 67,054Inter-group (1,039) (624) (1,437)elimination 40,048 35,759 65,617 Group operating profit Energy 3,036 3,919 4,277Building services 203 139 241Retail 412 328 383Property 750 350 442Other 68 (53) (49) 4,469 4,683 5,294Revaluation ofinvestment properties - - 1,219 4,469 4,683 6,513 Materially, all the Group's operations are conducted within the Channel Islands. All transfers between divisions are at arms-length basis. 3. Income tax Six months ended Year ended 31 March 30 September 2007 2006 2006 £000 £000 £000 Current income tax (420) (1,022) (849)Deferred income tax (99) (197) (502) Total income tax (519) (1,219) (1,351) On 30 January 2007 the draft 'zero-ten' legislation was approved by the Statesof Jersey and has now gone to the Privy Council in the UK for approval. The vastmajority of the legislation will come into effect from 1 January 2009 buttransitional rules apply to any company currently taxed on a prior year basis,so that they become taxed on a current year basis. Due to Transitional rulesthis results in Jersey tax paying companies being taxed in the 2008 year ofassessment at 20% on the average of the profits which they generate in thefinancial year ended in 2007 and 2008. The effective tax rate for those twoyears is therefore around half that experienced up to 2006 due to the migrationfrom a prior to current year basis but will revert to 20% for Island utilitiesfrom 2009 onwards. Notes to the Interim Accounts (Unaudited) 4. Dividends Six months ended Year ended 31 March 30 September 2007 2006 2006 £000 £000 £000 Distributions to equity holders and by subsidiaries in the period 1,050 7,764 8,450 The distribution to equity holders in the period consisted of £1,041,760 (68pnet of tax per share) in respect of the final dividend for 2006. In addition£8,400 was paid by subsidiaries to minority interests. The Directors have declared an interim dividend of 49p per share, net of tax(2006 - 44p) for the six months ended 31 March 2007 to shareholders on theregister at the close of business on 17 August 2007. This dividend was approvedby the Board on 16 May 2007 and has not been included as a liability at 31 March2007. In March 2006 a special dividend of £4.44 per share, net of tax, was made todistribute the proceeds from the sale of an investment property. 5. Reconciliation of movements in equity Share Other Retained capital reserves earnings Total £000 £000 £000 £000 At 1 October 2006 1,532 (1,098) 115,274 115,708 Total recognised income and expense for the year - - 4,356 4,356 Other recognised gains/(losses) - 361 - 361 Equity dividends - - (1,042) (1,042) As at 31 March 2007 1,532 (737) 118,588 119,383 At 1 October 2005 1,532 (528) 114,848 115,852 Total recognised income and expense for the year - - 5,942 5,942 Other recognised gains/(losses) - (570) 2,910 2,340 Equity dividends - - (8,426) (8,426) As at 30 September 2006 1,532 (1,098) 115,274 115,708 At 1 October 2005 1,532 (528) 114,848 115,852 Total recognised income and expense for the year - - 3,907 3,907 Other recognised gains/(losses) - 546 - 546 Equity dividends - - (7,752) (7,752) As at 31 March 2006 1,532 18 111,003 112,553 This information is provided by RNS The company news service from the London Stock Exchange