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| Name | Symbol | Market | Type |
|---|---|---|---|
| North Pow(n) 62 | LSE:15IM | London | Bond |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
From Mar 2020 to Mar 2025
TIDM15IM
RNS Number : 1838M
Northern Powergrid (Northeast) PLC
17 September 2021
REGISTERED NUMBER: 02906593
NORTHERN POWERGRID (NORTHEAST) plc
HALF-YEARLY FINANCIAL REPORT FOR THE
SIX MONTHSED 30 JUNE 2021
INTERIM MANAGEMENT REPORT
Cautionary Statement
This interim management report has been prepared solely to provide additional information to shareholders to assess the business and strategies of Northern Powergrid (Northeast) plc (the "Company") and its subsidiaries (together the "Group") and should not be relied on by any other party or for any other purpose.
Business Model
The Company is part of the Northern Powergrid Holdings Company and its subsidiaries group of companies (the "Northern Powergrid Group") and its principal activity during the six months to 30 June 2021 was to act as an authorised distributor under the Electricity Act 1989. The Company distributes electricity to approximately 1.6 million customers connected to its electricity distribution network within its distribution services area. The Company's subsidiary, Northern Electric Finance plc, provides finance to the Company.
Results for the six months ended 30 June 2021
The Group made a profit after tax of GBP22.5 million, a decrease of GBP2.0 million when compared to the 6 months ended 30 June 2020 due to the impact of change in tax legislation largely offset by higher revenues.
Revenue
Revenue at GBP187.5 million was GBP13.9 million higher than for the six months ended 30 June 2020 mainly due to higher tariffs and the reduced impact of COVID-19 when compared to the 6 months ended 30 June 2020.
Cash flow
Cash and cash equivalents as at 30 June 2021 were nil, representing a decrease of GBP0.3 million when compared with the position at 31 December 2020.
Northern Powergrid has access to GBP75.0 million under a three-year committed revolving credit facility provided by Lloyds Bank plc, National Westminster Bank plc and Santander UK plc, which is due to expire in October 2023, with a one year option to extend.
In addition, the Group has access to short-term borrowing facilities provided by Yorkshire Electricity Group plc, a related party, and to a GBP22.0 million overdraft facility provided by Lloyds Bank plc.
Dividends
No ordinary dividends were paid in the period resulting in GBP22.5 million being transferred to reserves.
Principal risks and uncertainties
Information concerning the principal risks and uncertainties facing the Group are included in the Group's latest annual reports and accounts for the year to 31 December 2020, which is available at www.northernpowergrid.com . It is anticpated that these risks will continue to be the principal risks facing the Company for the remaining six months of 2021.
Going concern
In the Group's latest annual reports and accounts for the year to 31 December 2020 the directors set out a number of factors they took into account when they considered continuing to adopt the going concern basis in preparing those annual reports and accounts. The directors confirm that no events have occurred during the six months to 30 June 2021, which alter the view expressed in the annual reports and accounts to 31 December 2020.
Future strategy and objectives
The directors intend that the Company will continue to develop its business by operating with the goal of efficiently investing in its distribution network, improving the quality of supply and service provided to customers and delivering the regulatory business plan for the remainder of the ED1 period.
Responsibility Statement
The board of directors confirm that to the best of their knowledge:
(a) the condensed set of finanical statements, which has been prepared in accordance with IAS 34, gives a true and fair view of the assets, liabilities, financial position and profit of the Group as required by Disclosure and Transparency Rules ("DTR") 4.2.4R for the six months to 30 June 2021; and
(b) the interim management report contains a fair review of the information required by DTR 4.2.7R.
By order of the board
T H France
Director
16 September 2021
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS -- SIX MONTHSED 30 JUNE 2021
Hot Features
Premium
6 Months 6 Months
ended 30 ended 30
June 2021 June 2020
(unaudited) (unaudited)
GBPm GBPm
Revenue 187.5 173.6
Cost of sales (6.4) (7.2)
------------ ------------
Gross profit 181.1 166.4
Operating expenses (104.1) (106.9)
------------ ------------
Operating profit 77.0 59.5
Gain/(loss) on disposals 0.2 (0.3)
Finance costs (13.4) (15.8)
------------ ------------
Profit before tax 63.8 43.4
Income tax expense (41.3) (18.9)
------------ ------------
Profit from ordinary activities after tax 22.5 24.5
------------ ------------
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - SIX MONTHSED 30 JUNE 2021
There is no other comprehensive income for the Group for the six months to 30 June 2021 or the comparative six month period in 2020 other than the profits reported above.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION - SIX MONTHSED 30 JUNE 2021
30 June 2021 31 December
2020
(unaudited)
GBPm GBPm
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 2,726.7 2,682.5
Right of use asset 12.8 13.0
Intangible assets 50.9 51.2
------------- ------------
2,790.4 2,746.7
------------- ------------
CURRENT ASSETS
Inventories 19.2 18.2
Trade and other receivables 47.7 52.4
Tax receivable - 2.9
Cash and cash equivalents - 0.3
------------- ------------
66.9 73.8
------------- ------------
TOTAL ASSETS 2,857.3 2,820.5
------------- ------------
EQUITY
SHAREHOLDERS' EQUITY
Share capital 200.0 200.0
Retained earnings 942.1 919.6
------------- ------------
TOTAL EQUITY 1,142.1 1,119.6
------------- ------------
LIABILITIES
NON-CURRENT LIABILITIES
Deferred revenue 644.3 641.7
Borrowings 810.3 810.2
Lease liabilities 9.7 9.0
Deferred tax 130.2 101.4
Provisions 0.1 0.1
------------- ------------
1,594.6 1,562.4
------------- ------------
CURRENT LIABILITIES
Trade and other payables 75.2 79.4
Deferred revenue 28.2 27.6
Borrowings 12.3 26.2
Lease liabilities 3.4 4.3
Tax payable 0.5 -
Provisions 1.0 1.0
------------- ------------
120.6 138.5
------------- ------------
TOTAL LIABILITIES 1,715.1 1,700.9
------------- ------------
TOTAL EQUITY AND LIABILITIES 2,857.3 2,820.5
------------- ------------
The interim financial statements were approved by the board of directors and authorised for issue on 16 September 2021 and were signed on its behalf by:
T H France
Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - SIX MONTHSED 30 JUNE 2021
Share Retained
Capital Earnings Total
GBPm GBPm GBPm
Balance at 1 January 2021 200.0 919.6 1,119.6
Profit for the period (unaudited) - 22.5 22.5
Balance at 30 June 2021 200.0 942.1 1,142.1
-------- --------- --------
Share Retained
Capital Earnings Total
GBPm GBPm GBPm
Balance at 1 January 2020 200.0 879.7 1,079.7
Profit for the period (unaudited) - 24.2 24.2
Balance at 30 June 2020 200.0 903.9 1,103.9
-------- --------- --------
Share Retained
Capital Earnings Total
GBPm GBPm GBPm
Balance at 1 January 2020 200.0 879.7 1,079.7
Profit for the year - 65.3 65.3
Equity dividends paid - (25.4) (25.4)
Balance at 31 December 2020 200.0 919.6 1,119.6
-------- --------- --------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS -- SIX MONTHSED 30 JUNE 2021
6 Months 6 Months
ended 30 ended 30
June 2021 June 2020
(unaudited) (unaudited)
GBPm GBPm
Profit for the year 22.5 24.5
Depreciation and amortisation 53.1 50.5
Amortisation of deferred revenue (13.8) (13.2)
(Profit)/loss on disposal of fixed assets (0.2) 0.3
Net finance costs 13.4 15.8
Income tax expense 41.3 18.9
------------ ------------
Cash flow before working capital movements 116.3 96.8
(Increase)/decrease in inventory (1.0) 0.6
Decrease in trade receivables 4.4 6.8
(Decrease)/increase in trade and other payables (4.2) 5.8
Increase in provisions - 0.1
------------ ------------
Cash generated from operations 115.5 110.1
Net interest paid (13.8) (9.8)
Tax paid (8.9) (16.7)
------------ ------------
Net cash from operating activities 92.8 83.6
------------ ------------
Investing activities
Proceeds from disposal of property, plant
and equipment 0.2 (0.3)
Purchase of property, plant and equipment (96.0) (97.8)
Purchase of intangibles (2.0) (0.1)
Receipt of customer contributions 16.9 12.2
------------ ------------
Net cash used in investing activities (80.9) (86.0)
------------ ------------
Financing activities
Repayment of borrowings - (39.3)
Movement in short term borrowings 5.0
Movement in intercompany borrowings (14.6) (103.2)
Lease payment (2.6) (2.0)
Issue of long-term borrowings - 294.3
Net cash (used in)/generated by financing
activities (12.2) 149.8
------------ ------------
Net (decrease)/increase in cash and cash
equivalents (0.3) 147.4
Cash and cash equivalents at beginning of 0.3 -
period
------------ ------------
Cash and cash equivalents at end of period - 147.4
------------ ------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The information included within these condensed financial statements that refer to the year ended 31 December 2020 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts and that report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
Basis of preparation
The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board ("IASB"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the IASB.
Going concern
In the Company's latest annual reports and accounts for the year to 31 December 2020 the directors set out a number of factors they took into account when they considered continuing to adopt the going concern basis in preparing those annual reports and accounts. The directors confirm that no events have occurred during the six months to 30 June 2021, which alter the view expressed in the annual reports and accounts to 31 December 2020.
Changes in accounting policy
The Group's accounting policies and methods of computation are the same as the accounting policies which are described in the Company's financial statements for the year ended 31 December 2020.
Application of new and revised IFRS
In the current year, the company has a number of amendments to IFRS by the IASB that are mandatorily effective for an accounting period that begins on or after 1 January 2021:
None of the standards, interpretations and amendments which are effective for periods beginning 1 January 2021 has had a material effect on the financial statements:
-- Amendments to IFRS 16- COVID 19 related rent concessions;
-- Amendments to IAS 1 - Presentation of financial statements; and
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - interest rate benchmark reform.
3. SEGMENTAL ANALYSIS
Revenue, profit before tax and net assets are attributable to electricity distribution. Revenue is all in respect of sales to United Kingdom customers.
Revenue represents charges made to customers for use of the distribution system, rental of meters, the recharge of costs incurred on behalf of related parties, amortisation of customer contributions and other goods sold and services provided, exclusive of value added tax.
4. INCOME TAX EXPENSE
Tax for the six month period ended 30 June 2021 is charged at 18.80% (six months ended 30 June 2020: 19.00%) which represents the best estimate of the average annual effective tax rate expected for the full year, as applied to the pre-tax income of the six month period. However, due to the tax rate change discussed below, the effective tax rate for the period to June 2021 is 64.7%.
6 months 6 months
ended 30 ended 30
June June
2021 2020
(unaudited) (unaudited)
GBPm GBPm
Current tax 12.5 8.1
Deferred tax 28.8 10.8
Total income tax expense 41.3 18.9
------------ ------------
Finance Bill 2020 was enacted in July 2020 and as a result, the rate of corporation tax has been held at 19% as the Finance Bill 2020 effectively removed the proposed reduction to 17% which was included within Finance Bill 2016.
In addition, the March 2021 Budget announced that the corporation tax rate will increase from 19% to 25% from 1 April 2023. This increase in tax rate was included within Finance Bill 2021 which was substantively enacted on 24 May 2021 and received Royal Assent on 10 June 2021. As a result, deferred tax balances have been re-measured at the 25% rate and this remeasurement has given rise to an increased deferred tax liability of GBP29.3m which is reflected within the above tax charge.
5. FINANCIAL INSTRUMENTS
Except as detailed in the following table, the directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost are approximately equal to their fair values:
Carrying value Fair value
30 June 31 December 30 June 31 December
2021 (unaudited) 2020 2021 (unaudited) 2020
GBPm GBPm GBPm GBPm
Financial liabilities
Short-term loan 5.0 - 5.0 -
Intercompany loan-
YEG 1.2 15.8 1.2 15.8
2035- 5.125% 149.3 153.2 204.3 225.3
2049- 2.750% 147.9 150.0 171.9 194.1
2062- 1.875% 294.7 297.3 283.0 338.4
NPGH 2037- 5.9% 102.9 100.0 153.7 164.7
EIB Loan 2027- 2.564% 121.7 120.1 131.5 134.4
822.7 836.4 950.6 107.7
6. RELATED PARTY TRANSACTIONS
Transactions entered into with related parties and balances outstanding were as follows:
Group
Borrowings
Sales Purchases from/( Interest
to related from related to) related to related
parties parties parties parties
GBPm GBPm GBPm GBPm
Related party
Six months ended
30 June 2021:
Integrated Utility
Services Limited 0.2 4.0 - -
Integrated Utility
Services Limited
(registered in Eire) - 1.0 - -
Northern Electric
plc - 2.4 - -
Northern Powergrid
Holdings Company - - 102.9 (2.9)
Northern Powergrid
(Yorkshire) plc 11.8 5.4 - -
Vehicle Lease and
Service Limited - 3.3 - -
Yorkshire Electricity
Group plc - - 1.2 (0.4)
------------ -------------- ------------- ------------
12.0 16.1 104.1 (3.3)
============ ============== ============= ============
Six months ended
30 June 2020:
Integrated Utility
Services Limited 0.1 2.2 - -
Integrated Utility
Services Limited
(registered in Eire) - 0.7 - -
Northern Electric
plc - 2.5 - -
Northern Powergrid
Holdings Company - - 103.2 (2.9)
Northern Powergrid
(Yorkshire) plc 11.9 5.1 - -
Vehicle Lease and
Service Limited - 3.1 - -
Yorkshire Electricity
Group plc - - (147.4) (0.4)
------------ -------------- ------------- ------------
12.0 13.6 (44.2) (3.3)
============ ============== ============= ============
Borrowings
Sales Purchases from/(to)to Interest
to related from related related to related
parties parties parties parties
GBPm GBPm GBPm GBPm
Year ended 31 December
2020:
Integrated Utility
Services Limited 0.3 4.6 - -
Integrated Utility
Services Limited
(registered in Eire) - 1.5 - -
Northern Electric
plc - 5.0 - -
Northern Powergrid
Holdings Company - - 100.0 (5.9)
Northern Powergrid
(Yorkshire) plc 23.0 10.5 - -
Vehicle Lease and
Service Limited - 4.9 - -
Yorkshire Electricity
Group plc - - 15.8 (0.3)
------------ -------------- ------------- ------------
23.3 26.5 115.8 (6.2)
============ ============== ============= ============
Sales and purchases from related parties were made at commercial prices.
Interest on loans to/from Group companies is charged at a commercial rate.
Company
Borrowings
Sales Purchases from/( Interest
to related from related to) related to related
parties parties parties parties
GBPm GBPm GBPm GBPm
Related party
Six months ended
30 June 2021:
Integrated Utility
Services Limited 0.2 4.0 - -
Integrated Utility
Services Limited
(registered in Eire) - 1.0 - -
Northern Electric
plc - 2.4 - -
Northern Powergrid
Holdings Company - - 102.9 (2.9)
Northern Powergrid
(Yorkshire) plc 11.8 5.4 - -
Vehicle Lease and
Service Limited - 3.3 - -
Northern Electric
Finance plc - - 298.9 (3.5)
Yorkshire Electricity
Group plc - - 1.5 (0.4)
------------ -------------- ------------- ------------
12.0 16.1 403.3 (6.8)
============ ============== ============= ============
Six months ended
30 June 2020:
Integrated Utility
Services Limited 0.1 2.2 - -
Integrated Utility
Services Limited
(registered in Eire) - 0.7 - -
Northern Electric
plc - 2.5 - -
Northern Powergrid
Holdings Company - - 103.2 (2.9)
Northern Powergrid
(Yorkshire) plc 11.9 5.1 - -
Vehicle Lease and
Service Limited - 3.1 - -
Northern Electric
Finance plc - - 405.0 (10.6)
Yorkshire Electricity
Group plc - - (151.0) (0.4)
------------ -------------- ------------- ------------
12.0 13.6 357.2 (13.9)
============ ============== ============= ============
Borrowings
Sales Purchases from/(to)to Interest
to related from related related to related
parties parties parties parties
GBPm GBPm GBPm GBPm
Year ended 31 December
2020:
Integrated Utility
Services Limited 0.3 4.6 - -
Integrated Utility
Services Limited
(registered in Eire) - 1.5 - -
Northern Electric
plc - 5.0 - -
Northern Powergrid
Holdings Company - - 100.0 (5.9)
Northern Powergrid
(Yorkshire) plc 23.0 10.5 - -
Vehicle Lease and
Service Limited - 4.9 - -
Northern Electric
Finance plc - - 299.9 (19.5)
Yorkshire Electricity
Group plc - - 17.4 (0.3)
------------ -------------- ------------- ------------
23.3 26.5 417.3 (25.7)
============ ============== ============= ============
Sales and purchases from related parties were made at commercial prices.
Interest on loans to/from Group companies is charged at a commercial rate.
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END
IR FLFVLATIDLIL
(END) Dow Jones Newswires
September 17, 2021 07:51 ET (11:51 GMT)
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