Jersey Electricity (JEL): Updated modelling of ...

Edison Investment Research Limited Jersey Electricity (JEL): Updated modelling of net zero implications 06-Jul-2022 / 11:34 GMT/BST London, UK, 6 July 2022 Jersey Electricity (JEL): Updated modelling of net zero implications Jersey Electricity (JEL) has consistently delivered a 5% increase in its DPS, which we expect to continue. Its cautious approach to financial risks means its wholesale electricity market-based exposure is materially hedged until FY25, which helps maintain relative price stability for its customers. It has a strong balance sheet, with cash of £43.1m, and its grid infrastructure is well invested. Electrification of Jersey’s heating and transport systems to achieve the government’s net zero ambitions provides an opportunity for growth. Based on our detailed modelling and the government of Jersey’s (GoJ’s) consultation draft of the Carbon Neutral Roadmap, we estimate full electrification of these two areas could increase electricity demand by 454GWh pa (454m units of electricity), representing a 71% increase on the 639m units sold by JEL in FY21. JEL trades at a discount to our asset-based sum-of-the-parts and discounted cashflow (DCF) valuations. Our overall valuation analysis (based on sum-of-the-parts and DCF) suggests a share valuation of 800p. We cross-check this with a peer valuation of 817p. The current share price appears modest for a company that offers the prospect of consistent increases in DPS, possesses balance sheet flexibility and is well positioned to benefit from decarbonisation initiatives.  Click here to view the full report or here to sign up to receive research as it is published. All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached – across institutions, family offices, wealth managers and retail investors – Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison’s reports are not solicitations to buy or sell any securities. For more information, please contact Edison: James Magness [phone] [e-mail] Learn more at www.edisongroup.com and connect with Edison on:  LinkedIn  www.linkedin.com/company/edison-group-/ Twitter   www.twitter.com/Edison_Inv_Res YouTube  www.youtube.com/edisonitv Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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1392137 06-Jul-2022