Nthn.elec.prf Regulatory News (NTEA)

25 Apr 2006 10:50

Northern Electric PLC25 April 2006 NORTHERN ELECTRIC plc ANNOUNCEMENT 25 APRIL 2006 PRELIMINARY STATEMENT OF ANNUAL RESULTS AND DIVIDENDS FOR YEAR ENDED 31 DECEMBER2005 The financial information set out below does not constitute the Group andCompany's statutory accounts for the years ended 31 December 2005 and 31December 2004. Statutory accounts for the year ended 31 December 2004 have beendelivered to the Registrar of Companies and those for the year ended 31 December2005 will be delivered to the Registrar of Companies by 31 July 2006. TheGroup's auditors have reported on the accounts for the year ended 31 December2004 and for the year ended 31 December 2005. Their reports were unqualified anddid not contain statements under Section 237(2) or (3) of the Companies Act1985. Adoption of International Financial reporting Standards ("IFRS") From 1 January 2005, Northern Electric plc is required to prepare consolidatedfinancial statements in accordance with IFRS, which is the required reportingbasis for all European Union listed companies from 2005. Whilst the financialinformation included in this preliminary announcement has been computed inaccordance with IFRSs, this announcement does not itself contain sufficientinformation to comply with IFRSs. The Company previously prepared consolidated financial statements in accordancewith UK GAAP until 31 December 2004. UK GAAP differs in certain respects fromIFRS and certain accounting, valuation and consolidation methods have beenamended, when preparing these financial statements, to comply with IFRS. Thecomparative figures in respect of 2004 have been restated to reflect theseamendments. The date of transition to IFRS is 1 January 2004. Principal Activities & Business Review Northern Electric plc is a subsidiary of CE Electric UK Funding Company. The results for the year to 31 December 2005 show a profit before tax of£111.7m. The directors recommend that no final dividend is paid in respect of the year.An interim dividend of 39.16 pence per ordinary share, totalling £50.0m, waspaid on 26 July 2005. The profit transferred to reserves for the year was£25.1m. Cash and cash equivalents were £146.5m as at 31 December 2005. The principal activity of Northern Electric plc during the year was to act as aholding company. The activities of its principal subsidiaries during the year were thedistribution of electricity and the provision of engineering contractingservices. Northern Electric Distribution Limited (NEDL), a wholly owned subsidiary, servesan area of approximately 14,400 sq km in the north east of England with aresident population of 3.2 million. NEDL's principal business receiveselectricity from the National Grid transmission system and distributes it tocustomers, at voltages of up to 132kV, via its own network of transformers,switchgear and cables. During the year, NEDL distributed electricity to customers in its distributionservices area and continued to improve the overall performance of itsdistribution network through its investment strategy being directed to delivertargeted improvements in an efficient and cost-effective manner. NEDL alsocontinued to improve services to its customers by reducing the overall number offaults and their effects, improving under-performing parts of the high voltagesystem, making best use of new equipment, investing in new information systemsand targeting storm resilience investment. The improvements were reflected inthe fact that NEDL outperformed the Ofgem targets for customer minutes lost andcustomer interruptions in the 2004/2005 regulatory year by 7.4% and 12.6%respectively. Integrated Utility Services Limited (IUS), a wholly owned subsidiary, providedengineering contracting services to a range of clients during the year,including Central Networks, Yorkshire Electricity Distribution plc (YEDL), NEDL,Northern Ireland Electricity and Network Rail. IUS continued to develop its engineering contracting business throughout theyear, with its main operations being providing electrical upgrade andrefurbishment services to Network Rail and the maintenance and refurbishment ofparts of the electricity distribution networks of YEDL, NEDL and CentralNetworks. On 5 May 2005 Northern Electric Finance plc (NEF), a wholly-owned subsidiary,issued a £150m 30-year bond at a rate of 5.125% and immediately invested £100mof the proceeds in a guaranteed investment contract at a rate of 4.75% maturingon 27 December 2007. On 17 October 2005 NEF redeemed the £100m 8.625% bonds due2005 in full. An option over the shares in Northern Electric Generation (TPL) Limited wasgranted to ELQ Investors Limited on 28 June 2005. During the year, the Group's focus on health and safety continued to be ofparamount importance for the directors, as it is for all employees. Providingand maintaining a safe working environment is the first objective of thebusiness and there is a continuous drive for improvement in safety performancethrough the setting of challenging goals and the pursuit of a programme ofon-site safety audits. NEDL maintained its OSHAS 18001 accreditation and bothNEDL and IUS again received a gold award from the Royal Society for thePrevention of Accidents for occupational health and safety performance andprovision. The gold status is awarded to recognise the achievement of continuedor improving standards of health and safety over at least a four-year period. As Principal Employer of the Northern Electric Group of the Electricity SupplyPension Scheme (the "Scheme"), the Company reached agreement during the yearwith the Independent Trustee and Group Trustees to repair the Scheme deficit.The agreement comprises monthly cash payments of £1.9m (£23.1m per annum) thatstarted in April 2005. Of these payments, £0.3m (£3.8m per annum) is recoveredby the Group from other participating employers in the Scheme within the CEElectric UK Funding Company group. These payments address the funding deficiencyof £116.6m over six years and the deficit of £190.3m over 12 years subject tomovements in actuarial assumptions adopted in the triennial valuation as at 31March 2004. Future Developments The directors intend to develop the Group and conduct its business in a mannerthat concentrates on its core skills of electricity distribution and engineeringcontracting. Enquiries Enquiries should be made to John Elliott, Company Secretary, on 0191 2235103. NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005 GROUP INCOME STATEMENT 2005 2004 £m £m Revenue 297.3 287.8Cost of sales (97.3) (94.1)Gross profit 200.0 193.7Distribution costs (54.4) (49.2)Administrative expenses (18.4) (20.6)Operating profit 127.2 123.9Share of profit after tax of joint venture and associateaccounted for using the equity method 0.6 0.5Other income 4.2 0.1Investment income 13.1 10.9Finance costs (33.4) (31.7)Profit before tax 111.7 103.7Income tax expense (36.6) (42.4)Profit from ordinary activities after tax attributed to equityshareholders of the Company 75.1 61.3 All activities relate to continuing operations. STATEMENT OF RECOGNISED INCOME AND EXPENSE There is no other income or expense for the Group other than the profitsreported above. NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005 GROUP BALANCE SHEET 2005 2004 £m £m Non-current assets Property, plant and equipment 1,009.7 937.2Intangibles 4.1 6.9Investments in joint venture andassociate 3.4 3.1Investments in other companies 13.6 0.1Long-term securities 100.0 -Trade and other receivables 2.8 4.8 1,133.6 952.1 Current assetsInventories 27.9 13.1Trade and other receivables 53.8 46.2Cash and cash equivalents 146.5 152.9 228.2 212.2 Total assets 1,361.8 1,164.3 Current liabilitiesTrade and other payables (82.1) (51.1)Current income tax liabilities (16.3) (30.7)Deferred revenue (7.0) (6.4)Borrowings (19.4) (118.6)Provisions (4.7) (8.0) (129.5) (214.8) Net current assets/(liabilities) 98.7 (2.6) Non-current liabilitiesBorrowings (346.8) (99.4)Deferred income tax liabilities (154.9) (142.0)Retirement benefit obligations (37.3) (66.8)Deferred revenue (305.4) (278.8)Provisions (0.7) (0.4) (845.1) (587.4) Total liabilities (974.6) (802.2) Net assets 387.2 362.1 EQUITYShare capital 72.2 72.2Share premium 158.8 158.8Retained earnings 150.0 124.9Other reserves 6.2 6.2 Total equity 387.2 362.1 NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005 GROUP STATEMENT OF CASH FLOWS 2005 2004 £m £m Net cash from operating activities 57.8 114.3Investing activitiesDividends received from joint ventures 0.2 0.2Proceeds/(payments) from disposal of business unit/associate 2.9 (1.1)(Purchase)/sale of long term securities (100.0) -Proceeds from disposal of property, plant and equipment - 0.1Purchases of property, plant and equipment (104.1) (95.0)Disposals/(purchases) of intangible assets 0.4 (1.8)Receipt of customer contributions 36.4 27.6Net cash used in investing activities (164.2) (70.0)Financing activities Equity dividends paid (50.0) -Movement in borrowings from parent undertakings 94.7 (1.7)Repayment of borrowings (100.0) -New borrowings raised 155.3 -Net cash from/(used in) financing activities 100.0 (1.7)Net (decrease)/increase in cash and cash equivalents (6.4) 42.6Cash and cash equivalents at beginning of year 152.9 110.3Cash and cash equivalents at end of year 146.5 152.9 This information is provided by RNS The company news service from the London Stock Exchange