TIDMJEL
RNS Number : 4669J
Jersey Electricity PLC
18 December 2015
JERSEY ELECTRICITY plc Preliminary Announcement of Annual
Results
Year Ended 30 September 2015
At a meeting of the Board of Directors held on 17 December 2015,
the final accounts for the Group for the year to 30 September 2015
were approved, details of which are attached.
The financial information set out in the announcement does not
constitute the Group's statutory accounts for the year ended 30
September 2015 or 2014, but is derived from those accounts.
Statutory accounts for 2014 have been delivered to the Jersey
Registrar of Companies and those for 2015 will be delivered in
early 2016. The auditor has reported on those accounts and their
reports were unmodified.
A final dividend of 7.60p on the Ordinary and 'A' Ordinary
shares in respect of the year ended 30 September 2015 was
recommended (2014: 7.20p). Together with the interim dividend of
5.25p the proposed total dividend declared for the year was 12.85p
on each share (2014: 12.20p)
The final dividend will be paid on 29 March 2016 to those
shareholders registered in the books of the Company on 19 February
2016. A dividend on the 5% cumulative participating preference
shares of 1.5% (2014: 1.5%) payable on 1 July 2016 was also
recommended.
The Annual General Meeting of the Company will be held on 3
March 2016.
M.P. Magee P.J. Routier
Finance Director Company Secretary
Direct telephone number : 01534 505321 Direct telephone number :
01534 505253
Direct fax number : 01534 505466 Direct fax number : 01534
505515
Email : mmagee@jec.co.uk Email : proutier@jec.co.uk
17 December 2015
The Powerhouse
PO Box 45
Queens Road
St Helier
Jersey JE4 8NY
JERSEY ELECTRICITY plc
Preliminary Announcement of Annual Results
Year ended 30 September 2015
The Chairman, Geoffrey Grime, comments :
"2014/15 has been an exceptionally good year for Jersey
Electricity. The completion of our Normandie 3 (N3) submarine cable
to France at the end of the last financial year and the resultant
first full year with our importation capacity restored to pre-2012
levels has transformed our business in several ways. Profitability,
supply reliability and carbon intensity have all showed marked
improvement when compared with the last three years and this has
been achieved whilst maintaining prices which continue to be
competitive with international benchmarks."
Financial Summary 2015 2014
------------------------------------ ---------- ---------
Electricity Sales in kWh 626.8m 620.6m
Revenue GBP100.5m GBP98.4m
Profit before tax pre-exceptional GBP 12.4m GBP10.0m
items
Earnings per share pre-exceptional
items 32.94p 24.26p
Dividends paid per ordinary
share 12.45p 11.80p
Final proposed dividend
per share 7.60p 7.20p
Net debt GBP17.5m GBP20.2m
Group revenue for the year to 30 September 2015 at GBP100.5m was
2% higher than in the previous financial year. Unit sales volumes
of electricity were 1.0% higher than last year with Energy revenues
rising 1.6% to GBP80.7m. Turnover in Powerhouse.je, our retail
business, decreased by 3% from GBP11.4m to GBP11.1m as the floor
space utilised by the business was reduced following the leasing of
floor space to a new external tenant from May 2014. Revenue in the
Property business rose from GBP2.0m to GBP2.1m linked to changes in
tenancy arrangements during the last two financial years. Revenue
from JEBS, our building services business, including internal
sales, rose 18% from levels experienced in 2014 to GBP5.0m.
Turnover in our Other Businesses, including internal sales,
remained at GBP3.2m.
Cost of sales fell by GBP3.9m to GBP64.6m associated mainly with
a higher level of importation displacing oil purchases in our
Energy business. Operating expenses, at GBP22.0m, rose by GBP1.9m
from their 2014 level with a GBP1.7m rise in depreciation,
associated with our recent material infrastructure spend, being the
main item.
Profit before tax, pre-exceptional items, for the year to 30
September 2015, rose 24% to GBP12.4m, from GBP10.0m in 2014,
reflecting a strong performance in our Energy business, and a
recovery in our retail business, Powerhouse.je. Profit before tax
post-exceptional items, rose from GBP6.5m last year to GBP13.2m in
2015 reflecting material one-off items. Exceptional items have had
a material impact on profits in the last 2 years and a narrative
detailing the background to such items is contained within this
document below.
Unit sales in our Energy business increased by 1%, rising from
621m to 627m kWh. The first quarter of the financial year was
milder than the corresponding period in the previous year but there
was a reversal in the second quarter. However both the overall
winter periods in the last two years have seen temperatures above
the long-term average and therefore milder than anticipated.
Profits in our Energy business rose from GBP8.0m to GBP11.5m. Two
main factors contributed to this increase in profit; firstly lower
levels of more costly generation and secondly, the rising asset
base (on which we apply a return) reflecting the heavier investment
in infrastructure over recent years. As reported previously, until
the new interconnector to France was commissioned in September
2014, we had been capacity constrained on importation and reliant
on a heavier mix of more expensive on-island oil-fired generation,
particularly in winter, when volumes are higher. In the financial
year we imported 94% of our requirements from France (up from 80%
in 2014) and only generated 1% of our electricity on-island
(compared to 15% last year). The remaining 5% of our electricity
came from the local Energy from Waste plant being at the same level
as in 2014. There were no customer tariff movements during 2015 and
our tariffs continue to remain competitive with other
jurisdictions.
Profits in our Property division, excluding the impact of
investment property revaluation, rose by GBP0.1m from GBP1.4m last
year with changes in occupancy levels being the main driver. Our
investment property portfolio was marginally revalued downwards
this year whereas it moved up by GBP0.1m in 2014. Our retailing
business, Powerhouse.je, showed good signs of recovery post a
rationalisation of floor space, a restructuring and re-branding of
the business during the 2014 financial year. This was reflected in
the movement from a loss of GBP0.1m last year to a profit of
GBP0.3m in 2015. JEBs, our contracting and business services unit
produced a marginal loss due to continued competitive pressures on
margin. Our other business units - Jersey Energy, Jendev and Jersey
Deep Freeze all had a profitable year.
Interest paid in 2015 was GBP1.5m whereas in 2014 it was
negligible as most of this cost was capitalised up to the date of
commissioning of our new N3 subsea cable. The taxation charge at
GBP2.4m was materially higher than the 2014 figure of GBP1.5m due
to higher profits including the taxation of exceptional items.
Group earnings per share, pre-exceptional items, increased 36%
to 32.94p compared to 24.26p in 2014 due mainly to an increase in
profitability. Earnings per share, after exceptional items, rose
from 16.10p in 2014 to 35.00p in 2015.
Dividends paid in the year, net of tax, rose by 6%, from 11.80p
in 2014 to 12.45p in 2015. The proposed final dividend for this
year is 7.60p, a 6% rise on the previous year. Dividend cover,
pre-exceptional items, rose from 2.1 times in 2014 to 2.6 times due
to a higher level of profits. If exceptional items are included
dividend cover rose from 1.4 times last year to 2.8 times in this
financial year.
Net cash inflow from operating activities at GBP23.4m was
GBP3.3m higher than in 2014 with increased profitability being the
primary driver. Capital expenditure, at GBP16.8m fell from GBP33.0m
last year as the Normandie 3 project spend dominated last year
albeit there was the settlement of GBP5.5m of residual project cost
in quarter 1 of this financial year. Net debt at the year-end of
GBP17.5m was GBP2.7m lower than last year.
Our defined benefits pension scheme, which had a GBP1.1m
deficit, net of deferred tax, at the 2014 year end increased to a
GBP5.8m deficit as at 30 September 2015. Scheme assets rose 2%
since the last year end but liabilities increased 7% due to a
reduction in the discount rate applied reflecting sentiments in
financial markets.
Exceptional Items
A number of items of an exceptional nature were incurred in the
last two financial years.
During this financial year we had two exceptional credits
amounting to GBP0.8m which have been adjusted in arriving at our
underlying profit figure. The first exceptional item resulted from
a network issue in France during March 2015 for which the CIEG
received a compensation payment from RTE (the grid operator) and
the net upside for the Jersey Electricity proportion was GBP0.5m.
Secondly we had created a provision in 2012 in relation to work
associated with the failure of the EDF1 subsea cable. Now that the
N1 project is progressing, the provision is no longer required, as
such work is part of the wider project, and GBP0.3m in relation to
this issue was released back to profit and is viewed as
exceptional. All these items have been assumed to be taxable.
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In the 2014 Annual Report we reported exceptional costs of
GBP0.6m and GBP1.2m in restructuring our retail business,
Powerhouse.je, and exiting our investment in Foreshore Limited
respectively. In addition, a GBP1.8m provision was established in
September 2014 for a repair to the subsea cable between Jersey and
Guernsey. As reported in our Interim Report this preventative
repair was successfully performed during January 2015 with the cost
fully covered by the provision.
Consolidated Income Statement 2015 2014
For the year ended 30 September GBP000's GBP000's
2015
Revenue 100,479 98,443
Cost of sales (64,604) (68,468)
Gross Profit 35,875 29,975
Revaluation of investment properties (45) 145
Operating expenses (21,931) (20,079)
------------------------- ----------------
Group operating profit before
exceptional items 13,899 10,041
Exceptional item - RTE outage 479 -
compensation
- impact of reversal of EDF1 310 -
related provision
- impairment of investment - (1,178)
- subsea cable repair - (1,800)
- restructuring costs - (570)
------------------------- ----------------
Group operating profit 14,688 6,493
Finance income 36 14
Finance costs (1,555) (51)
Profit from operations before
taxation 13,169 6,456
Taxation (2,397) (1,478)
------------------------- ----------------
Profit from operations after taxation 10,772 4,978
========================= ================
Attributable to:
Owners of the company 10,725 4,932
Non-controlling interest 47 46
------------------------- ----------------
10,772 4,978
========================= ================
Earnings per share
- basic and diluted 35.00p 16.10p
2015 2014
Consolidated Statement of Comprehensive GBP
Income GBP 000 000
Profit for the year 10,772 4,978
Items that will not be reclassified
subsequently to profit or loss:
Actuarial loss on defined benefit
scheme (5,706) (392)
Income tax relating to items not
reclassified 1,141 78
------------------------- ----------------
(4,565) (314)
Items that may be reclassified
subsequently to profit or loss:
Fair value loss on cash flow hedges (874) (4,567)
Income tax relating to items that
may be reclassified 175 913
------------------------- ----------------
(699) (3,654)
Total comprehensive income for
the year 5,508 1,010
Attributable to:
Owners of the Company 5,461 964
Non-controlling interests 47 46
------------------------- ----------------
5,508 1,010
Balance Sheet 2015 2014
For the year ended 30 September GBP
2015 GBP 000 000
NON-CURRENT ASSETS
Intangible assets 227 20
Property,plant and equipment 187,845 184,846
Investment properties 20,460 20,505
Secured loan accounts 731 838
Other investments 5 5
-------- --------
Total non-current assets 209,268 206,214
------------------------------------- -------- --------
CURRENT ASSETS
------------------------------------ -------- --------
Inventories 6,239 7,334
Trade and other receivables 14,777 16,474
Derivative financial instruments 1,194 -
Cash and cash equivalents 12,503 9,776
Total current assets 34,713 33,584
-------- --------
Total assets 243,981 239,798
------------------------------------- -------- --------
LIABILITIES
------------------------------------ -------- --------
Trade and other payables 17,597 24,675
Current tax liability 404 -
Derivative financial instruments 6,314 4,246
Total current liabilities 24,315 28,921
-------- --------
NET CURRENT ASSETS 10,398 4,663
-------------------------------------
NON-CURRENT LIABILITIES
------------------------------------ -------- --------
Trade and other payables 18,884 18,279
Retirement benefit deficit 7,291 1,372
Financial liabilities - preference
shares 235 235
Long-term borrowings 30,000 30,000
Deferred tax liabilities 15,529 14,852
Total non-current liabilities 71,939 64,738
-------- --------
Total liabilities 96,254 93,659
-------- --------
Net assets 147,727 146,139
------------------------------------- -------- --------
EQUITY
------------------------------------ -------- --------
Share capital 1,532 1,532
Revaluation reserve 5,270 5,270
ESOP reserve (97) (36)
Other reserves (4,214) (3,515)
Retained earnings 145,223 142,878
Equity attributable to owners
of the company 147,714 146,129
Non-controlling interests 13 10
-------- --------
Total equity 147,727 146,139
------------------------------------- -------- --------
Consolidated
Statement
of changes in
Equity Share Revaluation ESOP Other Retained Total
for the year
ended
30 September
2015 capital reserve reserve reserves earnings
GBP GBP GBP GBP GBP GBP
000 000 000 000 000 000
At 1 October
2014 1,532 5,270 (36) (3,515) 142,878 146,129
Total
recognised
income
and expense
for the
year - - - 10,725 10,725
Funding of
employee
share option
scheme - - (112) - - (112)
Amortisation
of employee
share option
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scheme - - 51 - - 51
Unrealised
loss on
hedges (net
of tax) - - - (699) (699)
Actuarial
loss on
defined
benefit
scheme (net
of tax) - - - - (4,565) (4,565)
Equity
dividends - - - - (3,815) (3,815)
At 30
September
2015 1,532 5,270 (97) (4,214) 145,223 147,714
=================== ==================== =============== ============== ============= ============
Share Revaluation ESOP Other Retained Total
capital reserve reserve reserves earnings
GBP GBP GBP GBP GBP GBP
000 000 000 000 000 000
At 1 October
2013 1,532 5,270 (58) 139 141,925 148,808
Total
recognised
income
and expense
for the
year - - - - 4,932 4,932
Amortisation
of employee
share option
scheme - - 22 - (22) -
Unrealised
loss on
hedges (net
of tax) - - - (3,654) - (3,654)
Actuarial
gain on
defined
benefit
scheme (net
of tax) - - - - (314) (314)
Equity
dividends - - - - (3,643) (3,643)
At 30
September
2014 1,532 5,270 (36) (3,515) 142,878 146,129
=================== ==================== =============== ============== ============= ============
Statements of Cash Flow 2015 2014
for the year ended 30 September
2015 GBP 000 GBP 000
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 13,899 10,041
Depreciation and amortisation
charges 9,926 8,259
Loss/(gain) on revaluation of
investment property 45 (145)
Pension operating charge less
contributions paid 213 (38)
Adjustment for foreign exchange
hedges - 63
Profit on sale of fixed assets 7 (11)
--------------------- -------------------
Operating cash flows before
movement in working capital 24,090 18,169
Decrease in inventories 1,095 2,100
Decrease/(increase) in trade
and other receivables 1,884 (252)
(Decrease)/increase in trade
and other payables (2,604) 513
Interest paid (1,548) (42)
Preference dividends paid (9) (9)
Cash amounts relating to exceptional
item 479 (353)
--------------------- -------------------
Net cash flows from operating
activities 23,387 20,126
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property,plant and
equipment (16,629) (32,501)
Capitalised interest paid (4) (547)
Investment in intangible assets (207) (6)
Net proceeds from disposal of
investment - 1,579
Net proceeds from disposal of
fixed assets 3 16
--------------------- -------------------
Net cash flows used in investing
activities (16,837) (31,459)
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid (3,859) (3,703)
Deposit interest received 36 14
Repayment of borrowings - (10,000)
Proceeds of borrowings - 30,000
--------------------- -------------------
Net cash flows used in financing
activities (3,823) 16,311
Net increase in cash and cash
equivalents 2,727 4,978
Cash and cash equivalents at
beginning of period 9,776 4,798
--------------------- -------------------
Net cash and cash equivalents
at end of period 12,503 9,776
Notes to the accounts
Year ended 30 September 2015
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc,
for the year ended 30 September 2015 have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union (EU), including International
Accounting Standards and Interpretations issued by the
International Financial Reporting Interpretations Committee
(IFRIC).
While the financial information included in this preliminary
announcement has been prepared in accordance with the appropriate
recognition and measurement criteria, this announcement does not
itself contain sufficient information to comply with IFRS. The
Group expects to publish full financial statements that comply with
IFRS in early 2016.
The Group has considerable financial resources and as a
consequence, the directors believe that the Group is well placed to
manage its business risks successfully. The directors have a
reasonable expectation that the Group 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 annual financial statements.
2 Segmental information
Revenue and profit information
are analysed between the
businesses as follows:
2015 2015 2015 2014 2014 2014
External Internal Total External Internal Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Energy 80,698 129 80,827 79,459 141 79,600
Building Services 4,148 808 4,956 3,294 907 4,201
Retail 11,087 40 11,127 11,414 33 11,447
Property 2,084 599 2,683 1,957 616 2,573
Other 2,462 777 3,239 2,319 878 3,197
---------- ----------- --------- --------- ---------- ---------
100,479 2,353 102,832 98,443 2,575 101,018
Intergroup elimination (2,353) (2,575)
--------- ---------
Revenue 100,479 98,443
--------- ---------
Operating profit
Energy 11,514 7,952
Building Services (58) (44)
Retail 334 (86)
Property 1,562 1,415
Other 592 659
--------- ---------
Operating profit before
property revaluation 13,944 9,896
Revaluation of investment
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