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JEL Jersey Electricity Plc

427.00
0.00 (0.00%)
Last Updated: 08:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Jersey Electricity Plc LSE:JEL London Ordinary Share JE00B43SP147 'A'ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 427.00 414.00 440.00 427.00 427.00 427.00 2 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Electric Services 125.08M 11.28M 0.3681 11.60 130.83M

Jersey Electricity PLC Half-year Report (6266O)

21/05/2018 7:00am

UK Regulatory


Jersey Electricity (LSE:JEL)
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TIDMJEL

RNS Number : 6266O

Jersey Electricity PLC

21 May 2018

Jersey Electricity plc

Interim Management Report

for the six months ended 31 March 2018

The Board approved at a meeting on 18 May 2018 the Interim Management Report for the six months ended 31 March 2018 and declared an interim dividend of 6.1p compared to 5.8p for 2017. The dividend will be paid on 29 June 2018 to those shareholders registered in the records of the Company at the close of business on 1 June 2018.

The Interim Management Report is attached and will be available to the public on the Company's website www.jec.co.uk/about-us/investor-relations/financial-figures-and-reports.

The Interim Management Report for 2018 has not been audited or reviewed by our external auditors nor have the results for the equivalent period in 2017. The results for the year ended 30 September 2017 have been extracted from the statutory accounts. The auditor has reported on those accounts and their reports were unmodified.

   M.P. Magee                                                               P.J. Routier 
   Finance Director                                                       Company Secretary 
   Direct telephone number : 01534 505201                  Direct telephone number : 01534 505253 
   Email : mmagee@jec.co.uk                                       Email : proutier@jec.co.uk 

18 May 2018

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 2018

 
 Financial Summary                         6 months   6 months 
                                             2018       2017 
----------------------------------------  ---------  --------- 
 Electricity Sales in kWh (000)            368,200    361,123 
 Revenue                                   GBP60.5m   GBP58.0m 
 Profit before tax                         GBP 9.7m   GBP 8.9m 
 Earnings per share                          24.9p      22.9p 
 Final dividend paid per ordinary 
  share                                       8.4p      8.0p 
 Proposed interim dividend per ordinary 
  share                                      6.1p       5.8p 
 Net debt                                  GBP20.2m   GBP29.4m 
 

Overall trading performance

Group revenue, at GBP60.5m, was 4% higher for the first half of 2018 than the same period in 2017 with GBP1.0m coming from a higher level of unit sales of electricity and GBP0.8m from our Powerhouse.je retailing business. Profit before tax was GBP9.7m being GBP0.8m ahead of the equivalent period last year and remains at a level commensurate with a sustainable rate of return typical for a regulated utility and at a quantum needed to maintain our continued investment in infrastructure. Cost of sales at GBP37.5m was GBP2.0m higher than last year with an increase in import costs in our Energy business and higher sales activity in Powerhouse.je being the main reasons. Operating expenses at GBP12.6m were GBP0.4m lower than in 2017 due to a general reduction in overhead costs. The taxation charge in the period of GBP2.0m was GBP0.1m higher than during the same period in 2017 due to increased profits. Earnings per share rose to 24.9p from 22.9p in 2017. Net debt on the balance sheet at 31 March 2018 was GBP20.2m (2017: GBP29.4m) compared to GBP21.9m at our last year end on 30 September 2017.

Energy performance

Unit sales of electricity rose 2%, from 361m to 368m kWh, compared with last year. The average temperature was mixed with the first quarter being milder, and the second quarter colder, than in the first half of the 2017 financial year. On 1 March we saw our highest ever maximum demand for electricity of 178 MW, when temperatures fell to a very unseasonal minus 3 degrees centigrade, being 11% higher than the previous record of 161 MW experienced in 2012. Revenues in our Energy business at GBP47.2m were GBP1.0m higher than in 2017. Operating profit at GBP8.7m was GBP1.0m higher than in the same period last year. Gross margin was impacted by increased imported electricity costs but other costs, such as manpower and maintenance were lower than the corresponding 2017 period. We imported 95% of our on-Island requirement from France (2017: 93%) and 5% from the Energy from Waste plant (2017: 5%), owned by the States of Jersey. Only 0.3% (1m units) of electricity was generated in Jersey using our own plant (2017: 2%) due to the availability of three subsea cables to France for the first full winter period post the commissioning of our third interlink, Normandie 1, in December 2016.

Investment in infrastructure

Capital expenditure was GBP7.1m in the first 6 months of the financial year compared to GBP8.6m in the same period last year. We continue with work on our new West of St Helier Primary sub-station which has an estimated cost of GBP17m, of which GBP10m has been expended to date, and is still planned to be commissioned in late 2018. Finally, our rollout of smart-enabled meters continues with around 39,000 installed in customer premises as at 31 March 2018 representing over 78% of our customer base.

Non-Energy performance

Year-on-year revenue in our retail business, Powerhouse.je, rose by 11% to GBP7.9m (2017: GBP7.1m) and profits rose 23% to GBP0.6m in what is a very competitive marketplace, both locally and off-island. Revenue and profit rose for our Property portfolio as a result of increased rental flows (profit up 5% to GBP0.9m). JEBS, our contracting and business services unit, saw a GBP0.2m increase in overall revenue to GBP3.1m but delivered a break-even position, down from a GBP0.1m profit in 2017 in a tight local market. Our remaining business units produced profits of GBP0.3m being GBP0.1m behind the same period in 2017.

Forward hedging of electricity and foreign exchange, and customer tariffs

We continue to focus on delivering secure low-carbon electricity supplies and stable customer tariffs. Through the use of our power purchase contract and hedging policies, this has been successfully achieved whilst maintaining an appropriate and fair return for our shareholders. Our electricity purchases are materially, albeit not fully, hedged for the period 2018-21. As these are contractually denominated in the Euro we enter into forward foreign currency contracts to reduce the volatility of our cost base and aid tariff planning. We have continued to see volatility in foreign exchange in the last six months against the Euro primarily driven by the uncertainty surrounding the UK Brexit decision, which is why we seek to manage this exposure. In April 2018 we announced a below inflation average rise in tariffs of 2%, from 1 June, largely driven by a weakening of sterling relative to the Euro and other inflationary factors. Customer tariffs last rose in April 2014 by 1.5%.

Debt and financing

The net debt figure fell to GBP20.2m at 31 March 2018 compared to GBP29.4m at this time last year (and GBP21.9m at 30 September 2017). After a high level of capital spending on undersea cables, and associated infrastructure, over recent years, the level of expenditure and associated net debt in this current year, has fallen. It is the aim of the Board that Jersey Electricity continues to maintain a prudent level of debt relative to our overall balance sheet, which remains strong.

Pension scheme

The defined benefit pension scheme deficit (without deduction of deferred tax) on our balance sheet at 31 March 2018, at GBP3.9m, was similar to the GBP4.2m level at 30 September 2017 (and a deficit of GBP4.8m at 31 March 2017). Since the last financial year end, scheme assets rose by GBP4m (to GBP133m) and liabilities also increased by GBP4m (to GBP137m). This increase in scheme liabilities is due to a decrease in relevant AA-rated bond yields partially offset by a decrease in assumed RPI inflation. Cash paid into the scheme during the six month period was GBP0.9m (2017: GBP1.0m) with the IAS 19 charge against profit being GBP1.6m (2017: GBP1.8m). The defined benefit scheme has been closed to new members since 2013.

Dividend

Your Board proposes to pay an interim net dividend for 2018 of 6.1p (2017: 5.8p). As stated previously we continue to aim to deliver sustained real growth each year over the medium-term. The final dividend for 2017 of 8.4p, paid in late March in respect of the last financial year, was an increase of 5% on the previous year.

Risk and outlook

The principal risks and uncertainties identified in our last Annual Report, issued in January 2018, have not materially altered in the interim period.

Your Board is satisfied that Jersey Electricity plc has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, we continue to adopt the going concern basis in preparing the condensed financial statements.

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 Directors Statement 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 Directors Statement 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); and

(d) this half yearly interim report contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. 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.

   C.J. AMBLER - Chief Executive       M.P.MAGEE - Finance Director            18 May 2018 

INVESTOR TIMETABLE FOR 2018

 
  1 June       Record date for interim ordinary dividend 
 29 June       Interim ordinary dividend for year ending 30 September 
                2018 
  2 July       Payment date for preference share dividends 
 14 December   Preliminary announcement of full year results 
 

Condensed Consolidated Income Statement (Unaudited)

 
                                                         Six months   Six months 
                                                              ended        ended       Year ended 
                                                           31 March     31 March     30 September 
                                                               2018         2017             2017 
                                              Note           GBP000       GBP000           GBP000 
 
 Revenue                                      2              60,463       58,004          102,320 
 Cost of sales                                             (37,506)     (35,507)         (63,186) 
 Gross profit                                                22,957       22,497           39,134 
 Revaluation of investment properties                             -            -               40 
 Operating expenses                                        (12,553)     (12,981)         (24,379) 
                                                        -----------  -----------  --------------- 
 Group operating profit                       2              10,404        9,516           14,795 
 Finance income                                                   7            1                3 
 Finance costs                                                (707)        (588)          (1,340) 
                                                        -----------  -----------  --------------- 
 Profit from operations before 
  taxation                                                    9,704        8,929           13,458 
 Taxation                                     3             (2,023)      (1,925)          (2,834) 
                                                        -----------  -----------  --------------- 
 Profit from operations after taxation                        7,681        7,004           10,624 
 
 Attributable to: 
 Owners of the Company                                        7,640        7,009           10,599 
 Non-controlling interests                                       41          (5)               25 
                                                        -----------  -----------  --------------- 
 
 Profit for the period/year attributable 
  to the equity holders of the parent 
  Company                                                     7,681        7,004           10,624 
                                                        -----------  -----------  --------------- 
 
 Earnings per share 
   - basic and diluted                                        24.9p        22.9p            34.6p 
 
 

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

 
                                          Six months   Six months 
                                               ended        ended       Year ended 
                                            31 March     31 March     30 September 
                                                2018         2017             2017 
                                              GBP000       GBP000           GBP000 
 
 Profit for the period/year                    7,681        7,004           10,624 
 
 Items that will not be reclassified 
  subsequently to 
  profit or loss: 
 Actuarial gain on defined benefit 
  scheme                                         964        7,547            8,859 
 Income tax relating to items not 
  reclassified                                 (193)      (1,509)          (1,772) 
                                                 771        6,038            7,087 
 
 Items that may be reclassified 
  subsequently to profit 
  or loss: 
 Fair value loss on cash flow hedges         (3,407)      (2,387)          (1,673) 
 Income tax relating to items that 
  may be reclassified                            681          477              335 
                                         -----------  -----------  --------------- 
                                             (2,726)      (1,910)          (1,338) 
 
 Total comprehensive income for 
  the period/year                              5,726       11,132           16,373 
 
 Attributable to: 
 Owners of the Company                         5,685       11,137           16,348 
 Non-controlling interests                        41          (5)               25 
                                         -----------  -----------  --------------- 
                                               5,726       11,132           16,373 
                                         -----------  -----------  --------------- 
 

Condensed Consolidated Balance Sheet (Unaudited)

 
                                       Note   As at 31       As at     As at 30 
                                                 March    31 March    September 
                                                  2018        2017         2017 
                                                GBP000      GBP000       GBP000 
 Non-current assets 
 Intangible assets                               1,077         189        1,110 
 Property, plant and equipment                 212,401     210,597      211,921 
 Investment property                            20,150      20,110       20,150 
 Trade and other receivables                       533         622          592 
 Derivative financial instruments       6          593       3,807        2,790 
 Other investments                                   5           5            5 
 
 Total non-current assets                      234,759     235,330      236,568 
                                             ---------  ----------  ----------- 
 
 Current assets 
 Inventories                                     6,618       5,736        6,825 
 Trade and other receivables                    21,559      20,571       15,782 
 Derivative financial instruments       6        3,337       2,891        4,454 
 Cash and cash equivalents                       9,767       4,556        8,076 
 
 Total current assets                           41,281      33,754       35,137 
                                             ---------  ----------  ----------- 
 
 Total assets                                  276,040     269,084      271,705 
                                             ---------  ----------  ----------- 
 
 Current liabilities 
 
 Trade and other payables                       14,147      13,058       15,885 
 Borrowings                                          -       4,000            - 
 Derivative financial instruments       6            8          13            - 
 Current tax payable                             2,813       1,166        1,034 
 
 Total current liabilities                      16,968      18,237       16,919 
                                             ---------  ----------  ----------- 
 
   Net current assets                           24,313      15,517       18,218 
                                             ---------  ----------  ----------- 
 
 Non-current liabilities 
 Trade and other payables                       21,820      20,751       20,177 
 Retirement benefit deficit                      3,855       4,764        4,219 
 Derivative financial instruments       6          257         327          172 
 Financial liabilities - preference 
  shares                                           235         235          235 
 Borrowings                                     30,000      30,000       30,000 
 Deferred tax liabilities                       23,490      21,992       23,719 
 
 Total non-current liabilities                  79,657      78,069       78,522 
                                             ---------  ----------  ----------- 
 
 Total liabilities                              96,625      96,306       95,441 
                                             ---------  ----------  ----------- 
 
 Net assets                                    179,415     172,778      176,264 
                                             ---------  ----------  ----------- 
 
 Equity 
 Share capital                                   1,532       1,532        1,532 
 Revaluation reserve                             5,270       5,270        5,270 
 ESOP reserve                                     (61)       (119)         (84) 
 Other reserves                                  2,932       4,968        5,658 
 Retained earnings                             169,700     161,119      163,862 
                                             ---------  ----------  ----------- 
 
 
 Equity attributable to owners 
  of the Company                               179,373     172,770      176,238 
 
 Non-controlling interests                          42           8           26 
                                             ---------  ----------  ----------- 
 
 Total equity                                  179,415     172,778      176,264 
                                             ---------  ----------  ----------- 
 

Condensed Consolidated Statement of Changes in Equity (Unaudited)

 
                                         Share  Revaluation     ESOP     Other  Retained     Total 
                                       capital      reserve  reserve  reserves  earnings  reserves 
                                        GBP000       GBP000   GBP000    GBP000    GBP000    GBP000 
 At 1 October 2017                       1,532        5,270     (84)     5,658   163,862   176,238 
 Total recognised income and expense 
  for the period                             -            -        -         -     7,640     7,640 
 Funding of employee share scheme            -            -      (9)         -         -       (9) 
 Amortisation of employee share 
  scheme                                     -            -       32         -         -        32 
 Unrealised loss on hedges (net 
  of tax)                                    -            -        -   (2,726)         -   (2,726) 
 Actuarial gain on defined benefit 
  scheme (net of tax)                        -            -        -         -       771       771 
 Equity dividends paid                       -            -        -         -   (2,573)   (2,573) 
                                       -------  -----------  -------  --------  --------  -------- 
 At 31 March 2018                        1,532        5,270     (61)     2,932   169,700   179,373 
                                       -------  -----------  -------  --------  --------  -------- 
 
 
 At 1 October 2016                       1,532        5,270    (155)     6,878   150,523   164,048 
 Total recognised income and expense 
  for the period                             -            -        -         -     7,009     7,009 
 Amortisation of employee share 
  scheme                                     -            -       36         -         -        36 
 Unrealised loss on hedges (net 
  of tax)                                    -            -        -   (1,910)         -   (1,910) 
 Actuarial gain on defined benefit 
  scheme (net of tax)                        -            -        -         -     6,038     6,038 
 Equity dividends paid                       -            -        -         -   (2,451)   (2,451) 
                                       -------  -----------  -------  --------  --------  -------- 
 At 31 March 2017                        1,532        5,270    (119)     4,968   161,119   172,770 
                                       -------  -----------  -------  --------  --------  -------- 
 
 
 At 1 October 2016                       1,532        5,270    (155)     6,878   150,523   164,048 
 Total recognised income and expense 
  for the year                               -            -        -         -    10,599    10,599 
 Funding of employee share scheme            -            -      (2)         -         -       (2) 
 Amortisation of employee share 
  scheme                                     -            -       73         -         -        73 
 Unrealised loss on hedges (net 
  of tax)                                    -            -        -   (1,338)         -   (1,338) 
 Actuarial gain on defined benefit 
  scheme (net of tax)                        -            -        -         -     7,087     7,087 
 Adjustment to reserves                      -            -        -       118     (118)         - 
 Equity dividends paid                       -            -        -         -   (4,229)   (4,229) 
                                       -------  -----------  -------  --------  --------  -------- 
 At 30 September 2017                    1,532        5,270     (84)     5,658   163,862   176,238 
                                       -------  -----------  -------  --------  --------  -------- 
 

Condensed Consolidated Cash Flow Statement (Unaudited)

 
                                               As at 31       As at     As at 30 
                                                  March    31 March    September 
                                                   2018        2017         2017 
                                                 GBP000      GBP000       GBP000 
 Cash flows from operating activities 
 
 Operating profit                                10,404       9,516       14,795 
    Depreciation and amortisation 
     charges                                      5,458       5,151       10,695 
    Share-based reward charges                       32          36           73 
    Gain on revaluation of investment 
     property                                         -           -         (40) 
    Pension operating charge less 
     contributions paid                             654         840        1,607 
    Payment for foreign exchange option             250           -            - 
    Loss/(profit) on sale of fixed 
     assets                                           -          42          (4) 
 
 Operating cash flows before movements 
  in working capital                             16,798      15,585       27,126 
 Working capital adjustments: 
     Decrease/(increase) in inventories             207         226        (863) 
     (Increase)/decrease in trade and 
      other receivables                         (5,718)     (3,928)          892 
     Increase/(decrease) in trade and 
      other payables                              1,017     (1,414)        1,230 
                                              ---------  ----------  ----------- 
 Net movement in working capital                (4,494)     (5,116)        1,259 
 Interest paid                                    (703)       (590)      (1,322) 
 Capitalised interest paid                            -       (172)        (172) 
 Preference dividends paid                          (4)         (4)          (9) 
 Income taxes paid                                    -           -        (421) 
 
 
 Net cash flows generated from operating 
  activities                                     11,597       9,703       26,461 
--------------------------------------------  ---------  ----------  ----------- 
 
 Cash flows from investing activities 
 
 Purchase of property, plant and 
  equipment                                     (6,914)     (8,508)     (14,252) 
 Investment in intangible assets                  (137)        (63)        (836) 
 Net proceeds from disposal of fixed 
  assets                                              -           3            4 
 
 
 Net cash used in investing activities          (7,051)     (8,568)     (15,084) 
--------------------------------------------  ---------  ----------  ----------- 
 
 Cash flows from financing activities 
 
 Equity dividends paid                          (2,573)     (2,451)      (4,229) 
 Dividends paid to non-controlling 
  interest                                         (25)        (39)         (59) 
 Deposit interest received                            7           1            3 
 Payment for foreign exchange option              (250)           -            - 
 Proceeds from borrowings                             -      18,000       18,000 
 Repayment of borrowings                              -    (14,000)     (18,943) 
 
 
 Net cash (used in) / generated 
  from financing activities                     (2,841)       1,511      (5,228) 
--------------------------------------------  ---------  ----------  ----------- 
 
 Net increase in cash and cash equivalents        1,705       2,646        6,149 
 Cash and cash equivalents at beginning 
  of period/year                                  8,076       1,925        1,925 
 Effect of foreign exchange rate 
  changes                                          (14)        (15)            2 
 
 Net cash and cash equivalents at 
  end of period/year                              9,767       4,556        8,076 
 

Notes to the Condensed Interim Accounts (Unaudited)

   1.         Accounting policies 

Basis of preparation

The interim financial statements for the six months ended 31 March 2018 have been prepared on the basis of the accounting policies set out in the 30 September 2017 annual report and accounts using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 'Interim Financial Reporting'. There have been no changes to accounting standards during the current financial year that would be expected to impact the disclosures in these financial statements, nor the full year financial statements that will be prepared for 30 September 2018.

The directors have a reasonable expectation that the Group (being the Company, Jersey Electricity plc and its subsidiary, Jersey Deep Freeze Ltd) 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 interim financial statements.

   2.         Revenue and profit 

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

 
                                      Six months ended         Six months ended                   Year ended 
                                         31 March 2018           31 March 2017                 30 September 2017 
                         External   Internal     Total   External   Internal     Total   External   Internal     Total 
 Revenue                   GBP000     GBP000    GBP000     GBP000     GBP000    GBP000     GBP000     GBP000    GBP000 
 
 Energy                    47,174         64    47,238     46,150         70    46,220     80,480        143    80,623 
 Building Services          2,865        249     3,114      2,413        472     2,885      3,982        915     4,897 
 Retail                     7,912         17     7,929      7,102         16     7,118     13,045         37    13,082 
 Property                   1,115        305     1,420      1,088        299     1,387      2,187        599     2,786 
 Other                      1,397        390     1,787      1,251        915     2,166      2,626      1,324     3,950 
                        ---------  ---------  --------  ---------  ---------  --------  ---------  ---------  -------- 
                           60,463      1,025    61,488     58,004      1,772    59,776    102,320      3,018   105,338 
 Intergroup 
  elimination                                  (1,025)                         (1,772)                         (3,018) 
                                              --------                        --------                        -------- 
 Revenue                                        60,463                          58,004                         102,320 
                                              --------                        --------                        -------- 
 
 Operating profit 
 Energy                                          8,667                           7,694                          11,723 
 Building Services                                (13)                             104                             131 
 Retail                                            567                             460                             731 
 Property                                          913                             870                           1,645 
 Other                                             270                             388                             525 
                                              --------                        --------                        -------- 
                                                10,404                           9,516                          14,755 
 
 Revaluation of 
  investment 
  properties                                         -                               -                              40 
 
 Operating profit                               10,404                           9,516                          14,795 
                                              --------                        --------                        -------- 
 

Materially, all of the Group's operations are conducted within the Channel Islands. All transactions between divisions are on an arm's-length basis. The assets and liabilities of the Group are not reported on as there has been no significant movement in the values in the six months to 31 March 2018.

   3.         Taxation 
 
                           Six months        Year ended 
                          ended 31 March     30 September 
                           2018      2017            2017 
                         GBP000    GBP000          GBP000 
 Current income tax       1,771     1,166           1,034 
 Deferred income tax        252       759           1,800 
                       --------  --------  -------------- 
 Total income tax         2,023     1,925           2,834 
                       ========  ========  ============== 
 

For the period ended 31 March 2018 and subsequent periods, the Company is taxable at the rate applicable to utility companies in Jersey of 20% (2017: 20%).

   4.         Dividends paid and proposed 
 
                                       Six months      Year ended 
                                          ended        30 September 
                                        31 March 
                                      2018     2017            2017 
 Dividends per share 
   - paid                             8.4p     8.0p           13.8p 
   - proposed                         6.1p     5.8p            8.4p 
 
 
                                    GBP000   GBP000          GBP000 
 Distributions to equity holders     2,573    2,451           4,228 
                                   -------  -------  -------------- 
 

The distribution to equity holders in respect of the final dividend for 2017 of GBP2,573,441 (8.4p net of tax per share) was paid on 29 March 2018.

The Directors have declared an interim dividend of 6.1p per share, net of tax (2017: 5.8p) for the six months ended 31 March 2018 to shareholders on the register at the close of business on 1 June 2018. This dividend was approved by the Board on 18 May 2018 and has not been included as a liability at 31 March 2018.

   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 consideration has also been given as to whether there have been any other events that would significantly affect the pension liabilities.

   6.         Financial instruments 

The Group held the following derivative contracts, classified as level 2 financial instruments at 31 March 2018.

 
 Fair value of currency hedges         31 March        30 September 
                                      2018      2017           2017 
 Derivative assets                 GBP'000   GBP'000        GBP'000 
 Less than one year                  3,337     2,891          4,454 
 Greater than one year                 593     3,807          2,790 
 
 Derivative liabilities 
 Less than one year                    (8)      (13)              - 
 Greater than one year               (257)     (327)          (172) 
 Total net assets                    3,665     6,358          7,072 
                                  ========  ========  ============= 
 

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy. This hierarchy is based on the underlying assumptions used to determine the fair value measurement as a whole and is categorised as follows:

Level 1 financial instruments are those with values that are immediately comparable to quoted (unadjusted) market prices in active markets for identical assets or liabilities;

Level 2 financial instruments are those with values that are determined using valuation techniques for which the basic assumptions used to calculate fair value are directly or indirectly observable (such as to readily available market prices);

Level 3 financial instruments are shown at values that are determined by assumptions that are not based on observable market data (unobservable inputs).

The derivative contracts for foreign currency shown above are classified as level 2 financial instruments and are valued using a discounted cash flow valuation technique. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

   7.         Related party transactions 

The Company conducts a variety of transactions with the States of Jersey and its associated entities:

 
                          Value of             Value of 
                           electricity       goods & other         Value of 
                           services            services         goods & services 
                           supplied            supplied            purchased          Amounts due         Amounts 
                           by Jersey           by Jersey           by Jersey           to Jersey        due by Jersey 
                           Electricity        Electricity         Electricity         Electricity        Electricity 
 Six months ended         2018      2017      2018     2017       2018       2017     2018     2017      2018     2017 
  31 March 
                        GBP000    GBP000    GBP000   GBP000     GBP000     GBP000   GBP000   GBP000    GBP000   GBP000 
 
 The States of 
  Jersey 
  and related 
  entities               5,139     5,347     1,165      808        791        782      564      742         6       99 
 

The States of Jersey is the Group's majority and controlling shareholder. Related entities include all corporatised entities that remain wholly owned by, or controlled by, the States of Jersey.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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