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Name | Symbol | Market | Type |
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North Powg 59 | LSE:76FN | London | Bond |
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TIDM76FN
RNS Number : 1842M
Northern Powergrid (Yorkshire) plc
17 September 2021
REGISTERED NUMBER: 04112320
NORTHERN POWERGRID (YORKSHIRE) 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 (Yorkshire) plc (the "Company") 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 2.3 million customers connected to its electricity distribution network within its distribution services area.
Results for the six months ended 30 June 2021
The Company made a profit after tax of GBP27.9 million, a decrease of GBP14.2 million when compared to the 6 months ended 30 June 2020 primarily due to the impact of the change in tax legislation, partially offset by higher revenues.
Revenue
Revenue at GBP229.8 million was GBP16.3 million higher than for the six months ended 30 June 2020 mainly due to higher tariffs and the larger impact of COVID-19 during last year's period.
Cash flow
Cash and cash equivalents as at 30 June 2021 were GBP159.9 million, representing an increase of GBP25.7 million since 31 December 2020. This compares with a decrease of GBP207.1 million in the comparative six month period, primarily due to loans repaid in the prior period and increased cash flows from operating activities.
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 GBP19.0 million overdraft facility provided by Lloyds Bank plc
Dividends
No ordinary dividends were paid in the period resulting in GBP27.9 million being transferred to reserves.
Principal risks and uncertainties
Information concerning the principal risks and uncertainties facing the Company are included in the Company's latest annual reports and accounts for the year to 31 December 2020, which is available at www.northernpowergrid.com . It is anticipated that these risks will continue to be the principal risks facing the Company for the remaining six months of 2021.
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.
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 Electricity Distribution 1 price period which ends on 31 March 2023.
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 Company 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
6 Months 6 Months ended 30 ended 30 June 2021 June 2020 (unaudited) (unaudited) GBPm GBPm Revenue 229.8 213.5 Cost of sales (8.1) (9.6) ------------ ------------ Gross profit 221.7 203.9 Operating expenses (118.1) (114.9) ------------ ------------ Operating profit 103.6 89.0 Other gains - 0.4 Finance income 1.1 0.6 Finance costs (19.7) (19.8) ------------ ------------ Profit before tax 85.0 70.2 Income tax expense (57.1) (28.1) ------------ ------------ Profit from ordinary activities after tax 27.9 42.1 ------------ ------------
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - SIX MONTHSED 30 JUNE 2021
There is no other comprehensive income for the Company for the six months to 30 June 2021 or the comparative six month period in 2020 other than the profits reported above.
30 June 2021 31 December 2020 (unaudited) GBPm GBPm ASSETS NON-CURRENT ASSETS Property, plant and equipment 3,656.4 3,581.1 Right of use asset 8.7 8.2 Intangible assets - 0.1 ------------- ------------ 3,665.1 3,589.4 ------------- ------------ CURRENT ASSETS Inventories 0.6 0.6 Trade and other receivables 61.4 68.5 Income tax asset - 1.5 Cash and cash equivalents 159.9 134.2 ------------- ------------ 221.9 204.8 ------------- ------------ TOTAL ASSETS 3,887.0 3,794.2 ------------- ------------ --- EQUITY SHAREHOLDERS' EQUITY Share capital 290.0 290.0 Retained earnings 1,299.4 1,271.5 ------------- ------------ --- TOTAL EQUITY 1,589.4 1,561.5 ------------- ------------ --- LIABILITIES NON-CURRENT LIABILITIES Deferred revenue 831.0 825.8 Borrowings 1,119.4 1,119.0 Lease liabilities 6.6 6.2 Deferred tax 178.5 138.3 Provisions 0.6 0.6 ------------- ------------ --- 2,136.1 2,089.9 ------------- ------------ --- CURRENT LIABILITIES Trade and other payables 95.1 88.4 Deferred revenue 34.7 34.1 Borrowings 26.8 17.2 Lease liabilities 2.3 2.2 Tax payable 1.7 - Provisions 0.9 0.9 ------------- ------------ 161.5 142.8 ------------- ------------ TOTAL LIABILITIES 2,297.6 2,232.7 ------------- ------------ TOTAL EQUITY AND LIABILTIES 3,887.0 3,794.2 ------------- ------------ ---
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
Share Retained Capital Earnings Total GBPm GBPm GBPm Balance at 1 January 2021 290.0 1,271.5 1,561.5 Profit for the period (unaudited) - 27.9 27.9 Balance at 30 June 2021 290.0 1,299.4 1,589.4 -------- --------- -------- Share Retained Capital Earnings Total GBPm GBPm GBPm Balance at 1 January 2020 290.0 1,199.8 1,489.8 Profit for the period (unaudited) - 42.1 42.1 Balance at 30 June 2020 290.0 1,241.9 1,531.9 -------- --------- -------- Share Retained Capital Earnings Total GBPm GBPm GBPm Balance at 1 January 2020 290.0 1,199.8 1,489.8 Profit for the year - 105.3 105.3 Equity dividends paid - (33.6) (33.6) Balance at 31 December 2020 290.0 1,271.5 1,561.5 -------- --------- -------- 6 Months 6 Months ended 30 ended 30 June 2021 June 2020 (unaudited) (unaudited) GBPm GBPm Profit for the year 27.9 42.1 Depreciation and amortisation 61.1 57.1 Amortisation of deferred revenue (16.8) (16.2) Net finance costs 18.6 19.2 Income tax expense 57.1 28.1 ------------ ------------ Cash flow before working capital movements 147.9 130.3 Decrease in inventory 0.1 0.1 Decrease in trade receivables 7.3 10.7 (Decrease)/increase in trade and other payables (1.5) 15.4 Increase in provisions 0.1 - Cash generated from operations 153.9 156.5 Net interest paid (14.3) (32.6) Tax paid (13.8) (27.3) ------------ ------------ Net cash from operating activities 125.8 96.6 ------------ ------------ Investing activities Proceeds from disposal of property, plant and equipment - 0.4 Purchase of property, plant and equipment (129.9) (121.1) Receipt of customer contributions 26.0 17.8 ------------ ------------ Net cash used in investing activities (103.9) (102.9) ------------ ------------ Financing activities Movement in short-term borrowings 5.0 - Repayment of long-term borrowing - (200.0) Lease payment (1.2) (0.8) Net cash used in financing activities 3.8 (200.8) ------------ ------------ Net increase/(decrease) in cash and cash equivalents 25.7 (207.1) Cash and cash equivalents at beginning of period 134.2 413.7 ------------ ------------ Cash and cash equivalents at end of period 159.9 206.6 ------------ ------------ 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 Company 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 Company'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, with the only changes being outlined below.
Application of new and revised IFRS
In the current year, the company has a number of amendments to IFRS by the International Accounting standards Board ("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 20.00% (six months ended 30 June 2020: 19.08%), 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 six month period to June 2021 is 67.2%.
6 months 6 months ended 30 ended 30 June June 2021 2020 (unaudited) (unaudited) GBPm GBPm Current tax 16.9 13.6 Deferred tax 40.2 14.5 Total income tax expense 57.1 28.1 ------------ ------------
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 GBP40.1m 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 - Bond 2025 - 2.5% 149.8 151.6 159.2 164.2 Bond 2032 - 4.375% 154.4 151.1 193.0 202.9 Bond 2035 - 5.125% 199.1 204.4 272.4 299.4 Bond 2059- 2.25% 298.6 295.1 318.0 367.7 EIB Loan - 4.133% 156.9 153.8 162.2 162.0 EIB Loan - 2.564% 131.8 130.1 142.5 145.6 EIB Loan - 2.073% 50.6 50.1 52.9 53.5 1,146.2 1,136.2 1,305.2 1,395.3 6. RELATED PARTY TRANSACTIONS
Transactions entered into with related parties and balances outstanding were as follows:
Sales Purchases Borrowings Interest to related from related to related from related parties parties parties parties GBPm GBPm GBPm GBPm Related party Six months ended 30 June 2021: Integrated Utility Services Limited - 0.6 - - Integrated Utility Services Limited (registered in Eire) - 0.2 - - Northern Electric plc - 1.0 - - Northern Powergrid Metering Limited 0.3 - - - Northern Powergrid (Northeast) plc 5.4 11.8 - - Vehicle Lease and Service Limited - 3.2 - - Yorkshire Electricity Group plc - - 159.9 0.1 ------------ -------------- ------------ -------------- 5.7 16.8 159.9 0.1 ============ ============== ============ ============== Six months ended 30 June 2020: Integrated Utility Services Limited 0.1 0.9 - - Integrated Utility Services Limited (registered in Eire) - 0.2 - - Northern Electric plc - 1.3 - - Northern Powergrid Metering Limited 0.3 - - - Northern Powergrid (Northeast) plc 5.1 11.9 - - Vehicle Lease and Service Limited - 3.0 - - Yorkshire Electricity Group plc - - 206.6 0.6 ------------ -------------- ------------ -------------- 5.5 17.3 206.6 0.6 ============ ============== ============ ============== Sales Purchases Borrowings Interest to related from related to related from related parties parties parties parties GBPm GBPm GBPm GBPm Year ended 31 December 2020: Integrated Utility Services Limited 0.1 4.2 - - Integrated Utility Services Limited (registered in Eire) - 0.4 - - Northern Electric plc - 2.5 - - Northern Powergrid Metering Limited 0.6 - - - Northern Powergrid (Northeast) plc 10.5 23.0 - - Vehicle Lease and Service Limited 0.1 4.7 - - Yorkshire Electricity Group plc - - 134.2 0.6 ------------ -------------- ------------ -------------- 11.3 34.8 134.2 0.6 ============ ============== ============ ==============
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) Dow Jones Newswires
September 17, 2021 07:42 ET (11:42 GMT)
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