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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 0.0% 535.00 530.00 540.00 535.00 535.00 535.00 42 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electricity 110.3 14.8 38.4 13.9 62

Jersey Electricity PLC Half-year Report

14/05/2020 1:27pm

UK Regulatory (RNS & others)


Jersey Electricity (LSE:JEL)
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TIDMJEL

RNS Number : 9488M

Jersey Electricity PLC

14 May 2020

Jersey Electricity plc

Interim Management Report

for the six months ended 31 March 2020

The Board approved at a meeting on 14 May 2020 the Interim Management Report for the six months ended 31 March 2020 and declared an interim dividend of 6.80p compared to 6.45p for 2019. The dividend will be paid on 26 June 2020 to those shareholders registered in the records of the Company at the close of business on 5 June 2020.

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 2020 has not been audited, or reviewed, by our external auditors nor have the results for the equivalent period in 2019. The results for the year ended 30 September 2019 were extracted from the statutory accounts. The auditor has reported on those accounts and their report was 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 

14 May 2020

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 2020

 
 Financial Summary                         6 months    6 months 
                                              2020       2019 
----------------------------------------  ----------  --------- 
 Electricity Sales in kWh                   371.4m      356.7m 
 Revenue                                   GBP64.0m    GBP58.9m 
 Profit before tax                          GBP10.0m    GBP9.3m 
 Earnings per share                          25.95p     23.83p 
 Final dividend paid per ordinary 
  share                                       9.25p       8.80p 
 Proposed interim dividend per ordinary 
  share                                       6.80p       6.45p 
 Net debt                                   GBP2.9m    GBP12.1m 
 

COVID-19 - impact on trading performance

Due to the timing of the Interim Report, the period to end March was not materially impacted by the COVID-19 outbreak. A Stock Exchange announcement in response to the crisis was issued to the market on 31 March. We are continuing to assess trending data on how revenue, working capital and bad debt provisioning might be impacted but it is still too early to establish a clear picture. In our Energy business we are working closely with customers to provide a level of flexibility on payment terms considering each situation on a case-by-case basis where those customers have been directly affected. Bad debts have historically not been a material issue and in the past we have carried specific provisioning against known payment issues of around GBP0.1m. We have increased this by a further GBP0.5m to GBP0.6m in these financial statements and will refine our methodology as the duration and impact of the COVID-19 crisis becomes clearer. Our other business units generally had a strong first six months, but we expect there to be a consequential reduction in revenue in the second half of the year. For example, our Powerhouse Retail saw a spike in activity around the time of lockdown but closed its doors at the end of March and is now trading predominantly online. In our Property business, some tenants have sought flexibility in rental payments, and we have again considered each situation on a case-by-case basis. We will continue to closely monitor the impact of COVID-19 on our full business but our balance sheet, with cash balances and low levels of gearing, remains strong.

Overall trading performance in the 6 months to 31 March

Group revenue, at GBP64.0m, was 9% higher for the first half of 2020 compared to the same period last year mainly due to a rise in both Energy and Retail revenue. Profit before tax at GBP10.0m was GBP0.8m higher than 2019 with a rise in Energy profits associated with higher unit sales of electricity at a slightly higher price, being the main reasons. Cost of sales at GBP39.3m was GBP2.6m higher than last year with the rise in Energy and Retail revenue being the main factor. Operating expenses at GBP13.9m were GBP0.9m higher driven primarily by a GBP0.5m increase in bad debt provisioning in our Energy business and GBP0.4m of additional depreciation in our Property business. The taxation charge in the period of GBP2.1m was GBP0.2m higher than last year due to increased profits. Earnings per share, at 25.95p, were ahead of 23.83p in 2019 due to higher profits. Net debt on the balance sheet, which comprises borrowings less cash and cash equivalents, at 31 March 2020 was GBP2.9m compared to GBP12.1m at this time last year (and GBP5.1m at our last year end on 30 September 2019).

Energy performance

Unit sales of electricity rose 4% from 357m to 371m kWh, compared with last year. This had been anticipated as milder weather was experienced in the prior year period. Revenues in our Energy business at GBP49.9m were GBP3.3m higher than in 2019 with the year-on-year increase in unit sales and the 3.5% tariff rise in April 2019 being the primary drivers. Other income received was GBP0.8m lower than in 2019 when we received a rebate for subsea cable repair costs. Operating profit at GBP9.0m was GBP0.9m higher than in the same period last year due to higher gross margin associated with higher revenue. We imported 96% of our on-island requirement from France and 4% from the Energy from Waste plant, owned by the Government of Jersey. Only 0.2% (less than 1m units) of electricity was generated in Jersey using our own plant due to the availability of our three subsea cables to France. These importation and generation levels were consistent with the same period last year.

Non-Energy performance

Year-on-year revenue in our Powerhouse retail business, rose by 18% to GBP9.6m (2019: GBP8.1m) and profits rose by GBP0.2m to GBP0.8m with very strong revenue achieved in March linked to COVID-19, and the resultant need of many of our customers to acquire computer equipment to aid work homeworking. Profit for our Property portfolio at GBP0.5m was GBP0.4m lower than last year, due to accelerated depreciation of air conditioning equipment which is currently being replaced in our Powerhouse building. JEBS, our contracting and business services unit, saw a GBP0.3m increase in external revenue to GBP1.9m and a rise in profitability to GBP0.1m. Our remaining business units produced profits of GBP0.4m being at a similar level to that delivered in 2019.

Liquidity and cashflow

Net cash generated in the period was GBP2.2m (2019: GBP2.1m) post the continued investment in infrastructure of GBP5.1m (2019: GBP6.4m). The net debt figure fell to GBP2.9m at 31 March 2020 compared to GBP12.1m at this time last year (and GBP5.1m at 30 September 2019). Net debt consists of GBP30.0m of long-term debt offset by cash balances of GBP27.1m. We also have an unused GBP10m revolving credit facility and a GBP2m overdraft facility.

Forward hedging of electricity and foreign exchange, and customer tariffs

We continue to focus on delivering secure, low-carbon electricity supplies and our goal is to maintain relative stability in customer tariffs, despite volatility in both European wholesale electricity and foreign exchange markets. Our electricity purchases are materially, albeit not fully, hedged for the period 2020-23. 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. In February 2020 we announced a below inflation average rise in tariffs of 2.5% from 1 April, largely driven by a weakening of Sterling relative to the Euro and other inflationary factors. We subsequently deferred this rise to 1 October in response to the COVID-19 outbreak at an approximate cost of GBP1m for this financial year. The tariffs payable by an average customer continue to benchmark well against other jurisdictions. The 'default maximum tariff', introduced by Ofgem (the electricity Regulator) to cap prices payable in the UK, is set at a level that is over 30% higher than the average price a customer would pay in Jersey.

Pension scheme

The defined benefit pension scheme surplus (without deduction of deferred tax) on our balance sheet at 31 March 2020 stood at GBP14.3m, compared to a surplus of GBP10.4m level at 30 September 2019 (and a deficit of GBP3.4m at 31 March 2019). Since the last financial year end scheme liabilities have materially decreased by approximately GBP15m (to GBP129m). This fall was primarily due to a substantial widening of credit spreads in the 6 weeks prior to 31 March resulting in a significant increase in the discount rate (from 1.9% at the last financial year end to 2.4% at 31 March 2020). Assets in the Scheme fell by around GBP13m (to GBP142m). The defined benefit scheme has been closed to new members since 2013. The next triennial valuation of the pension scheme, as at 31 December 2021, will be performed in 2022.

Impact of new accounting standard

Adoption of IFRS 16 has resulted in an increase in Group operating profit of GBP43,000 (representing a GBP92,000 reduction in rental expense offset by a GBP49,000 increase in depreciation). Finance costs have increased by GBP65,000 resulting in a decrease in Profit from Operations before Taxation of GBP22,000. At 31 March 2020 the net value of right of use assets under IFRS 16 totaled GBP2.9m with a corresponding lease liability of GBP2.9m. There is no impact on total cash and cash equivalents.

Dividend

Your Board proposes to pay an interim net dividend for 2020 of 6.80p (2019: 6.45p). As previously stated, we continue to aim to deliver sustained real growth each year over the medium-term. At this time, we do not expect the COVID-19 outbreak to influence our dividend strategy, but we will continue to review the position as the impact of COVID-19 becomes clearer through the remainder of 2020. The final dividend for 2019 of 9.25p, 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 2020, have not materially altered in the interim period, except for matters associated with COVID-19 principally concerning reduced demand for electricity, and the ability of customers to pay. We reported on Brexit considerations in the 2019 Annual Report and in relation to Brexit, our view has not altered since then.

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 approval 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       14 May 2020 

INVESTOR TIMETABLE FOR 2020

 
  5 June       Record date for interim ordinary dividend 
 26 June       Interim ordinary dividend for year ending 30 September 
                2020 
  1 July       Payment date for preference share dividends 
 17 December   Preliminary announcement of full year results 
 

Condensed Consolidated Income Statement (Unaudited)

 
                                                                 Six months ended      Year 
                                                                                       ended 
                                                                   31-Mar              30-Sep 
                                                                   2020       2019       2019 
                                                   Note         GBP 000        GBP        GBP 
                                                                               000        000 
 
 Revenue                                            2            63,977     58,945    110,294 
 Cost of sales                                                 (39,287)   (36,689)   (69,282) 
                                                         --------------  ---------  --------- 
 Gross profit                                                    24,690     22,256     41,012 
 
 Other income                                                         -        750        750 
 Profit on revaluation of investment 
  properties                                                          -          -        689 
 Operating expenses                                            (13,931)   (13,056)   (26,369) 
                                                         --------------  ---------  --------- 
 Group operating profit                             2            10,759      9,950     16,082 
 Finance income                                                      89         39        103 
 Finance costs                                                    (806)      (735)    (1,365) 
 
 Profit from operations before taxation                          10,042      9,254     14,820 
 Taxation                                           3           (2,064)    (1,911)    (2,969) 
                                                         --------------  ---------  --------- 
 
 Profit from operations after taxation                            7,978      7,343     11,851 
 
 Attributable to: 
 Owners of the Company                                            7,953      7,302     11,773 
 Non-controlling interests                                           25         41         78 
                                                         --------------  ---------  --------- 
                                                                  7,978      7,343     11,851 
 
 Earnings per share 
 - basic and diluted                                             25.95p     23.83p     38.42p 
 
 Condensed Consolidated Statement of Comprehensive Income 
  (Unaudited) 
                                                                GBP 000        GBP        GBP 
                                                                               000        000 
 
 Profit for the period/year                                       7,978      7,343     11,851 
 Items that will not be reclassified 
  subsequently to profit or loss: 
 Actuarial gain/(loss) on defined benefit 
  scheme                                                          4,503    (7,526)      7,643 
 Income tax relating to items not reclassified                    (901)      1,505    (1,529) 
                                                         --------------  ---------  --------- 
                                                                  3,602    (6,021)      6,114 
 Items that may be reclassified subsequently 
  to profit or loss: 
 Fair value loss on cash flow hedges                              (246)    (5,210)    (3,007) 
 Income tax relating to items that may 
  be reclassified                                                    49      1,042        601 
                                                         --------------  ---------  --------- 
                                                                  (197)    (4,168)    (2,406) 
 
 Total comprehensive income for the period/year                  11,383    (2,846)     15,559 
 Attributable to: 
 Owners of the Company                                           11,358    (2,887)     15,481 
 Non-controlling interests                                           25         41         78 
                                                         --------------  ---------  --------- 
                                                                 11,383    (2,846)     15,559 
 

Condensed Consolidated Balance Sheet (Unaudited)

 
                                       Note               As at 31       As at     As at 30 
                                                             March    31 March    September 
                                                              2020        2019         2019 
                                                            GBP000      GBP000       GBP000 
 Non-current assets 
 Intangible assets                                             589         826          683 
 Property, plant and equipment                             216,589     215,533      217,046 
 Right of use assets                    1                    2,880           -            - 
 Investment property                                        21,240      20,460       21,240 
 Trade and other receivables                                   350         425          383 
 Retirement benefit surplus                                 14,320           -       10,417 
 Derivative financial instruments       6                      514           -          208 
 Other investments                                               5           5            5 
 
 Total non-current assets                                  256,487     237,249      249,982 
                                             ---------------------  ----------  ----------- 
 
 Current assets 
 Inventories                                                 5,590       7,423        6,018 
 Trade and other receivables                                22,658      20,506       17,995 
 Derivative financial instruments       6                      100          78          197 
 Cash and cash equivalents                                  27,080      17,939       24,915 
 
 Total current assets                                       55,428      45,946       49,125 
                                             ---------------------  ----------  ----------- 
 
 Total assets                                            311,915       283,195      299,107 
                                             ---------------------  ----------  ----------- 
 
 Current liabilities 
 
 Trade and other payables                                   16,496      16,014       17,320 
 Lease liabilities                      1                       55           -            - 
 Derivative financial instruments       6                      320         738          298 
 Current tax payable                                         3,463       4,047        2,714 
 
 Total current liabilities                                  20,334      20,799       20,332 
                                             ---------------------  ----------  ----------- 
 
   Net current assets                                       35,094      25,147       28,793 
                                             ---------------------  ----------  ----------- 
 
 Non-current liabilities 
 Trade and other payables                                   21,949      20,471       21,757 
 Lease liabilities                      1                    2,847           -            - 
 Retirement benefit deficit                                      -       3,375            - 
 Derivative financial instruments       6                      737       1,739          303 
 Financial liabilities - preference 
  shares                                                       235         235          235 
 Borrowings                                                 30,000      30,000       30,000 
 Deferred tax liabilities                                   27,744      23,369       26,936 
 
 Total non-current liabilities                              83,512      79,189       79,231 
                                             ---------------------  ----------  ----------- 
 
 Total liabilities                                         103,846      99,988       99,563 
                                             ---------------------  ----------  ----------- 
 
 Net assets                                                208,069     183,207      199,544 
                                             ---------------------  ----------  ----------- 
 
 Equity 
 Share capital                                               1,532       1,532        1,532 
 Revaluation reserve                                         5,270       5,270        5,270 
 ESOP reserve                                                 (45)           -         (45) 
 Other reserves                                              (354)     (1,919)        (157) 
 Retained earnings                                         201,604     178,252      192,882 
                                             ---------------------  ----------  ----------- 
 
 
 Equity attributable to owners 
  of the Company                                         208,007       183,135      199,482 
 
 Non-controlling interests                                      62          72           62 
                                             ---------------------  ----------  ----------- 
 
 Total equity                                              208,069     183,207      199,544 
                                             ---------------------  ----------  ----------- 
 

Condensed Consolidated Statement of Changes in Equity (Unaudited)

 
                                   Share   Revaluation         ESOP      Other   Retained     Total 
                                 capital       reserve      reserve   reserves   earnings   reserve 
                                     GBP       GBP 000          GBP    GBP 000    GBP 000   GBP 000 
                                     000                        000 
 At 1 October 2019                 1,532         5,270         (45)      (157)    192,882   199,482 
 Total recognised income 
  and expense for the period           -             -            -          -      7,953     7,953 
 Unrealised loss on hedges 
  (net of tax)                         -             -            -      (197)          -     (197) 
 Actuarial gain on defined 
  benefit scheme (net of tax)          -             -            -          -      3,602     3,602 
 Equity dividends paid                 -             -            -          -    (2,833)   (2,833) 
 As at 31 March 2020               1,532         5,270         (45)      (354)    201,604   208,007 
                                --------  ------------  -----------  ---------  ---------  -------- 
 
 
 At 1 October 2018                 1,532         5,270         (41)      2,249    179,666   188,676 
 Total recognised income 
  and expense for the period           -             -            -          -      7,302     7,302 
 Funding of employee share 
  option scheme                        -             -         (22)          -          -      (22) 
 Amortisation of employee 
  share scheme                         -             -           63          -          -        63 
 Unrealised loss on hedges 
  (net of tax)                         -             -            -    (4,168)          -   (4,168) 
 Actuarial loss on defined             -             -            -          -    (6,021)       GBP 
  benefit scheme (net of tax) 
 Equity dividends paid                 -             -            -          -    (2,695)   (2,695) 
 As at 31 March 2019               1,532         5,270            -    (1,919)    178,252   183,135 
                                --------  ------------  -----------  ---------  ---------  -------- 
 
 
 At 1 October 2018                 1,532         5,270         (41)      2,249    179,666   188,676 
 Total recognised income 
  and expense for the period           -             -            -          -     11,773    11,773 
 Funding of employee share 
  option scheme                        -             -         (20)          -          -      (20) 
 Amortisation of employee 
  share scheme                         -             -           16          -          -        16 
 Unrealised loss on hedges 
  (net of tax)                         -             -            -    (2,406)          -   (2,406) 
 Actuarial gain on defined 
  benefit scheme (net of tax)          -             -            -          -      6,114     6,114 
 Equity dividends paid                 -             -            -          -    (4,671)   (4,671) 
 As at 30 September 2019           1,532         5,270         (45)      (157)    192,882   199,482 
                                --------  ------------  -----------  ---------  ---------  -------- 
 

Condensed Consolidated Cash Flow Statement (Unaudited)

 
                                                     Six months ended      Year 
                                                           March           ended 
                                                        2020      2019       2019 
 Cash flows from operating activities                    GBP       GBP    GBP 000 
                                                         000       000 
 Operating profit before exceptional items            10,759     9,950     16,082 
 Adjustments to add back / (deduct) non-cash 
  items and items disclosed elsewhere on the 
  CFS: 
 Depreciation and amortisation charges                 5,726     5,584     11,604 
 Share based reward charges                                -        63         16 
 Gain on revaluation of investment property                -         -      (689) 
 Pension operating charge less contributions 
  paid                                                   683       460      1,977 
 Profit on sale of property, plant and equipment        (20)         -        (2) 
 Operating cash flows before movement in 
  working capital                                     17,148    16,057     28,988 
                                                   ---------  --------  --------- 
 Working capital adjustments: 
         Decrease/(increase) in inventories              428     (331)      1,074 
         Increase in receivables                     (4,700)   (5,226)    (2,675) 
         (Decrease)/increase in payables               (686)     1,442      4,023 
                                                   ---------  --------  --------- 
 Net movement in working capital                     (4,958)   (4,115)      2,422 
 Interest paid                                         (802)     (731)    (1,356) 
 Preference dividends paid                               (4)       (4)        (9) 
 Income taxes paid                                   (1,357)         0    (2,300) 
 Net cash flows from operating activities             10,027    11,207     27,745 
                                                   ---------  --------  --------- 
 
 Cash flows from investing activities 
 Purchase of property, plant and equipment           (5,021)   (6,381)   (13,850) 
 Investment in intangible assets                        (76)      (60)       (90) 
 Net proceeds from disposal of fixed assets               25         -          2 
 Net cash flows used in investing activities         (5,072)   (6,441)   (13,938) 
                                                   ---------  --------  --------- 
 
 Cash flows from financing activities 
 Equity dividends paid                               (2,833)   (2,695)    (4,671) 
 Dividends paid to non-controlling interest             (25)      (22)       (69) 
 Deposit interest received                                89        39        103 
 Repayment of borrowings and lease liabilities          (27)         -          - 
 Proceeds of borrowings                                    -         -          - 
 Net cash flows used in financing activities         (2,796)   (2,678)    (4,637) 
                                                   ---------  --------  --------- 
 
 Net increase in cash and cash equivalents             2,159     2,088      9,170 
 Cash and cash equivalents at beginning of 
  the period/year                                     24,915    15,735     15,735 
 Effect of foreign exchange rate changes                   6       116         10 
 Cash and cash equivalents at end of the 
  period/year                                         27,080    17,939     24,915 
                                                   ---------  --------  --------- 
 
   Notes to the Condensed Interim Accounts   (Unaudited) 
   1.         Accounting policies 

Basis of preparation

The interim financial statements for the six months ended 31 March 2020 have been prepared on the basis of the accounting policies set out in the 30 September 2019 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 has been one change to accounting standards during the current financial period that has impacted the disclosures in these financial statements and the full year financial statements that will be prepared for 30 September 2020:

IFRS 16 'Leases' has been endorsed by the EU and is effective for periods commencing on or after 1 January 2019. It replaces IAS 17 'Leases' and sets out the principles for the recognition, measurement, presentation and disclosure of leases.

For the purposes of the transition when applying IFRS 16, the Group has adopted the modified retrospective approach, including the application of the following practical expedients:

-- Reliance on the previous identification of a lease (under the previous IAS 17 standard) for all contracts that existed on the date of initial application;

-- Reliance on previous assessments (under IAS 37) on whether leases are onerous rather than performing an impairment review;

-- The application of a single discount rate to a portfolio of leases with similar characteristics;

-- Exclusion of initial direct costs from the measurement of the right-of-use assets at the date of initial application;

-- The measurement of the lease liability as at 1 October 2019 and the creation of an equal value right of use asset as at that date (where accrual and prepayment adjustments are not material).

Furthermore, the Group has applied the exemptions within the standard whereby both leases with a contractual duration of 12 months or less and leases for assets which are deemed "low value" will continue to be expensed to the income statement over the remainder of the lease term.

Where the Group is lessor of freehold properties, these leases have been determined to be operating leases in accordance with the substance of such lease transactions. The accounting for these leases does not change following the adoption of IFRS 16 with lease revenue being recognised on a straight-line basis.

The current lease charges have been used to establish a present value of the lease liabilities existing as at 1 October 2019. For the purposes of discounting, the Group has made use of the practical expedient in selecting the interest rate used. Given the portfolio of leases materially relate to long term leases of land for the Group's Energy division it has been determined that the average rate of 4.47% on the GBP30m borrowings from Pricoa, which is considered to be incremental rate of borrowing for the Group, is used in the calculation of the lease liability.

 
 Lease liabilities reconciliation:                     GBP'000 
 Operating lease commitments as at 30 September 
  2019                                                  13,477 
 Recognition exemption for short term and low value 
  leases on date of transition                           (787) 
 Lease term adjustments and other reconciling items 
  (net)                                                (5,683) 
                                                      -------- 
 Non-discounted lease liability under IFRS 16            7,007 
 Discount effect                                       (4,078) 
 Total lease liability recognised on 1 October 2019      2,929 
                                                      -------- 
 

The Group has two covenants with its lenders, neither of which will be materially impacted by IFRS 16.

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 2020                               31 March 2019                           30 September 
                                                                                                                                 2019 
                               External       Internal        Total        External       Internal        Total   External       Internal     Total 
 Revenue                         GBP000         GBP000       GBP000          GBP000         GBP000       GBP000     GBP000         GBP000    GBP000 
 Energy - arising in 
  the 
  course of ordinary 
  business                       49,917             68       49,985          46,663             58       46,721     83,907            126    84,033 
               - 
                arising 
                from 
                the 
                sale 
                of 
                heavy 
                fuel 
                oil                   -              -            -               -              -            -      2,723              -     2,723 
 Building Services                1,897            506        2,403           1,573            478        2,051      3,286            809     4,095 
 Retail                           9,576             35        9,611           8,123             22        8,145     15,199             59    15,258 
 Property                         1,137            322        1,459           1,133            302        1,435      2,262            612     2,874 
 Other                            1,450            426        1,876           1,453            437        1,890      2,917            898     3,815 
                                                                     --------------                              --------- 
                                 63,977          1,357       65,334          58,945          1,297       60,242    110,294          2,504   112,798 
 Intergroup elimination                                     (1,357)                                     (1,297)                             (2,504) 
                                                             63,977                                      58,945                             110,294 
                                                        -----------                                 -----------                            -------- 
 Operating Profit 
 Energy                                                       9,007                                       8,155                              12,281 
 Building Services                                              106                                          13                                (79) 
 Retail                                                         824                                         632                                 895 
 Property                                                       464                                         837                               1,679 
 Other                                                          358                                         313                                 617 
                                                        -----------                                 -----------                            -------- 
                                                             10,759                                       9,950                              15,393 
 Revaluation of 
  investment 
  properties                                                      -                                           -                                 689 
                                                        -----------                                 -----------                            -------- 
 Operating profit                                            10,759                                       9,950                              16,082 
 

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 2020.

   3 .         Taxation 
 
                           Six months        Year ended 
                          ended 31 March     30 September 
                           2020      2019            2019 
                         GBP000    GBP000          GBP000 
 Current income tax       2,106     1,748           2,714 
 Deferred income tax       (42)       163             255 
                       --------  --------  -------------- 
 Total income tax         2,064     1,911           2,969 
                       --------  --------  -------------- 
 

For the period ended 31 March 2020 and subsequent periods, the Company is taxable at the rate applicable to utility companies in Jersey of 20% (2019: 20%).

   4.         Dividends paid and proposed 
 
                                       Six months      Year ended 
                                          ended        30 September 
                                        31 March 
                                      2020     2019            2019 
 Dividends per share 
   - paid                            9.25p    8.80p          15.25p 
   - proposed                        6.80p    6.45p           9.25p 
 
 
                                    GBP000   GBP000          GBP000 
 Distributions to equity holders     2,833    2,695           4,671 
                                   -------  -------  -------------- 
 

The distribution to equity holders in respect of the final dividend for 2019 of GBP2,833,284 (9.25p net of tax per share) was paid on 26 March 2020.

The Directors have declared an interim dividend of 6.80p per share, net of tax (2019: 6.45p) for the six months ended 31 March 2020 to shareholders on the register at the close of business on 5 June 2020. This dividend was approved by the Board on 14 May 2020 and has not been included as a liability at 31 March 2020.

   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 2020.

 
 Fair value of currency hedges         31 March        30 September 
                                      2020      2019           2019 
 Derivative assets                 GBP'000   GBP'000        GBP'000 
 Less than one year                    100        78            197 
 Greater than one year                 514         -            208 
 
 Derivative liabilities 
 Less than one year                  (320)     (738)          (298) 
 Greater than one year               (737)   (1,739)          (303) 
 Total net liabilities               (443)   (2,399)          (196) 
                                  --------  --------  ------------- 
 

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 

Jersey Electricity plc conducts a variety of transactions with the Government of Jersey and its associated entities:

 
                             Value of          Value of            Value of           Amounts due         Amounts 
                            electricity      goods & other      goods & services       to Jersey        due by Jersey 
                             services          services            purchased          Electricity        Electricity 
                             supplied          supplied            by Jersey 
                             by Jersey         by Jersey          Electricity 
                            Electricity       Electricity 
 Six months ended          2020     2019      2020     2019       2020       2019     2020     2019      2020     2019 
  31 March 
                         GBP000   GBP000    GBP000   GBP000     GBP000     GBP000   GBP000   GBP000    GBP000   GBP000 
 
 The Government of 
  Jersey and related 
  entities                5,076    4,707       922      963      1,248        947      144      473         -       10 
 

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