Prelim Announcement 2010

RNS Number : 1292Y

Jersey Electricity Company Ld

17 December 2010

 

 

          Jersey Electricity plc             

 Preliminary Announcement of Annual Results

Year Ended 30 September 2010

At a meeting of the Board of Directors held on 16 December 2010, the final accounts for the Group for the year to 30 September 2010 were approved, details of which are attached.

The financial information set out in the announcement does not constitute the Company's statutory accounts for the year ended 30 September 2010 or 2009, but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Jersey Registrar of Companies and those for 2010 will be delivered in early 2011. The auditors have reported on those accounts and their reports were unqualified. 

A final dividend of £1.24 on the Ordinary and 'A' Ordinary shares in respect of the year ended 30 September 2010 was recommended, which together with the interim dividend of £0.81, makes a total proposed dividend declared for the year of £2.05 on each £1 share. In addition a special dividend of £0.65 was declared to distribute a £1m windfall receipt received from an Associate Company.

The final dividend and special dividend will be paid on 31 March 2011 to those shareholders registered in the books of the Company on 25 February 2011. A dividend on the 5% cumulative participating preference shares of 1.5% (2009:1.5%) payable on 1 July 2011 was also recommended.

The Annual General Meeting of the Company will be held on 3 March 2011.

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 : [e-mail]                                                       Email : [e-mail]

17 December 2010     

The Powerhouse,

PO Box 45,

Queens Road,

St Helier,

Jersey JE4 8NY

JERSEY ELECTRICITY plc                       

Preliminary Announcement of Annual Results

Year ended 30 September 2010                                                                               

The Chairman, Geoffrey Grime, comments :

"Despite a 5% decrease in electricity tariffs to our customers from January 2010 Jersey Electricity produced a sound financial performance in 2010 largely buoyed by our non-Energy business units which were positively impacted by the revaluation of our investment properties portfolio and a "windfall" receipt from asset sales by our associate. Return on fixed assets in the Energy business was at a level needed to support our infrastructure investment going forward and is consistent with returns made by regulated utilities. Volatility in our imported power prices still remains but we are pleased to announce that following our 5% reduction in 2010 we intend to freeze electricity prices until 2012. We are pleased to report that throughout this period the tariffs for most of our customers have remained competitive with, and in many cases cheaper than, other jurisdictions."

Financial Summary	2010	2009	% rise
Turnover	£98.9m	£93.6m	6%
Profit before tax	£14.6m	£9.3m	57%
Profit in Energy business	£7.7m	£6.7m	16%
Earnings per share	£8.04	£4.70	71%
Dividend paid per ordinary share	£1.99	£1.89	5%

Group turnover for the year to 30 September 2010 at £98.9m was 6% higher than in the year ended 30 September 2009. Unit sales volumes in our Energy business were marginally higher than last year, and combined with the timing of tariff changes, increased revenues by 2% to £74.5m.

Profit before tax for the year to 30 September 2010 rose to £14.6m but £2.4m was attributable to the revaluation of our investment property portfolio and £1m from the distribution of proceeds by our associate Newtel from the sale of assets. 

Profits in our Energy business moved up from £6.7m last year to £7.7m in 2010. Tariffs to our customers were reduced by 5% in January 2010, being made possible by our hedged position on both power and foreign exchange, and will remain frozen until at least 2012 unless severe unexpected operational problems are experienced. We again imported most of our power requirements (93% against 92% in the previous year) but generated on-Island, at a higher level than the long-term average, when oil prices made this advantageous. We also entered into an optimization agreement with EDF which allowed us to use our generation facilities in Jersey when market opportunities arose.

Profits in our Property division, excluding upside from property revaluations, rose £0.6m to £1.9m  due to an increase in rental flows and the settlement of a rent review with one of our tenants back-dated to June 2008. Our investment property portfolio was revalued upwards by £2.4m in 2010 largely due to the aforementioned rent review with our largest tenant.

Despite the current trading conditions our Retailing business saw profits rise from £0.3m to £0.5m with turnover up 11% to £14.4m. The Building Services business produced a £0.2m profit, being on a par with last year, even though pressure on margins prevailed in a very competitive marketplace. In addition, our other business units - Jersey Energy, Jendev and Jersey Deep Freeze, all had a profitable year. We also received £1m from our associate Newtel for fibre optic lease rentals and the part repayment of a loan written off in 2004 when the investment value was reduced to zero. These additional revenues are largely non-recurring and were associated with the distribution of funds raised by Newtel from the sale of its data centre assets in Guernsey. Foreshore, our data centre joint venture, saw an increased annual turnover which rose by over 20% from £4.1m to £5.0m and profitability was improved by £0.1m. 

Interest received on deposits in 2010 was £0.3m against £0.6m last year due primarily to lower interest rates associated with the UK base rate remaining at 0.5% during the full financial year period. The taxation charge for the year rose £0.2m to £2.2m due to higher taxable profits. 

Group earnings per share rose 71% to £8.04 compared to £4.70 in 2009 as profit was higher but also a sizeable element of the increase was due to non-recurring revenues and a revaluation of the investment property portfolio (which is not taxable as it is a non-realised capital adjustment).

Dividends paid, net of tax, rose by 5% from £1.89 in 2009 to £1.99 in 2010. The proposed final dividend for this year is £1.24, being a 5% rise on the previous year. In addition a special dividend of 65p, net of tax, is also proposed to distribute the windfall receipt of £1m from Newtel. Dividend cover rose from 2.5 times in 2009 to 4 times this year due primarily to a higher level of profits but this does not reflect the impact of the proposed special dividend as that will be distributed in the next financial year. If the dividend cover figure excluded the unrealised property revaluation profit and the Newtel receipt then the underlying cover figure for 2010 would have remained at the same level as in 2009 of 2.5 times.  

Net cash inflow from operating activities at £17.4m was £1.8m higher than 2009. Capital expenditure, at £8.7m fell from £12.1m last year largely as a result of the completion in 2009 of the £14m Western Primary capital project, to reinforce the electricity network in the west of Jersey.The South Hill Primary capital project started during this financial year and is anticipated to be completed in 2011 at a total cost of around £10m.Cash, including short-term investments, at the year end was £22.7m being £5.8m higher than last year.

Our defined benefits pension scheme, which showed a £3.0m deficit, net of deferred tax, at the 2009 year end showed a £1.4m surplus as at 30 September 2010.

Consolidated Income Statement
for the year ended 30 September 2010
				2010		2009
				£000		£000
Revenue				98,889		93,594
Cost of sales				(68,845)		(66,903)
Gross profit				30,044		26,691
Revaluation of investment properties				2,391		(106)
Operating expenses				(18,226)		(17,818)
Group operating profit before joint venture				14,209		8,767
Share of profit/(loss) of joint venture				26		(59)
Group operating profit				14,235		8,708
Interest receivable				338		577
Finance costs				(13)		(11)
Profit from operations before taxation				14,560		9,274
Taxation				(2,185)		(2,032)
Profit from operations after taxation				12,375		7,242
Minority interest				(60)		(38)
Profit for the year attributable to the equity holders of the parent company
				12,315		7,204
Attributable to:
Owners of the company				12,375		7,242
Minority interest				(60)		(38)
				12,315		7,204
				£		£
Earnings per share
- basic and diluted				8.04		4.70
Statements of Comprehensive Income
for the year ended 30 September 2010
				Group					Company
				2010		2009			2010		2009
				£000		£000			£000		£000
Profit for the  year				12,315		7,204			12,267		7,225
Other comprehensive income
Actuarial gain/(loss) on defined benefit scheme				5,158		(11,455)			5,158		(11,455)
Fair value loss on cash flow hedges				(1,212)		(996)			(1,212)		(996)
Impairment of investment				-		-			(280)		-
Tax related components relating to other comprehensive income				(860)		2,458			(860)		2,458
Total comprehensive income  for the year				15,401		(2,789)			15,073		(2,768)
Attributable to:
Owners of the company				15,461		(2,751)			15,073		(2,768)
Minority interest				(60)		(38)			-		-
				15,401		(2,789)			15,073		(2,768)

	Balance Sheets at 30 September 2010			Group				Company
				2010		2009		2010	2009
				£ 000		£ 000		£ 000	£ 000
	NON-CURRENT ASSETS
	Intangible assets			29		60		29	60
	Property, plant and equipment			120,944		120,581		120,944	120,581
	Investment property			14,928		12,529		14,928	12,529
	Other investments			1,677		1,804		3,115	3,395
	Long-term loans			-		-		450	600
	Retirement benefit surplus			1,795		-		1,795	-
	Total non-current assets			139,373		134,974		141,261	137,165
	CURRENT ASSETS
	Inventories			7,573		6,069		7,507	6,001
	Trade and other receivables			15,958		14,871		15,763	14,665
	Derivative financial instruments			387		1,599		387	1,599
	Short-term investments - cash deposits			17,920		8,200		17,920	8,200
	Cash and cash equivalents			4,756		8,636		4,612	8,569
	Total current assets			46,594		39,375		46,189	39,034
	Total assets			185,967		174,349		187,450	176,199
	LIABILITIES
	Trade and other payables			14,116		13,857		14,040	13,808
	Current tax payable			2,066		1,699		2,066	1,699
	Total current liabilities			16,182		15,556		16,106	15,507
	NET CURRENT ASSETS			30,412		23,819		30,083	23,527
	NON-CURRENT LIABILITIES
	Trade and other payables			15,907		14,676		15,907	14,676
	Retirement benefit deficit			-		3,708		-	3,708
	Financial liabilities - preference shares			235		235		235	235
	Deferred tax liabilities			11,932		10,827		11,932	10,827
	Total non-current liabilities			28,074		29,446		28,074	29,446
	Total liabilities			44,256		45,002		44,180	44,953
	Net assets			141,711		129,347		143,270	131,246
	EQUITY
	Share capital			1,532		1,532		1,532	1,532
	Other reserves			756		1,726		756	1,726
	Retained earnings			139,396		126,074		140,982	127,988
	Equity attributable to owners of the company			141,684		129,332		143,270	131,246
	Minority interest			27		15		-	-
	Total equity			141,711		129,347		143,270	131,246

Cash Flow Statement
for the year ended 30 September 2010
		Group		Company
		2010	2009	2010	2009
		£ 000	£ 000	£ 000	£ 000
Cash flows from operating  activities
Operating profit		14,209	8,767	14,127	8,692
Depreciation and amortisation charges		7,997	7,828	7,997	7,826
Revaluation of investment property		(2,391)	106	(2,391)	106
Pension contributions paid less expense in Income Statement		(348)	(1,039)	(348)	(1,039)
Loss on sale of fixed assets		-	24	-	24
Operating cash flows before movement in working capital		19,467	15,686	19,385	15,609
(Increase)/decrease in inventories		(1,502)	33	(1,506)	40
Increase in trade and other receivables		(1,065)	(2,841)	(1,076)	(2,849)
Increase in trade and other payables		1,809	2,950	1,776	2,951
Interest received		312	690	312	688
Preference dividends paid		(9)	(9)	(9)	(9)
Income taxes paid		(1,572)	(933)	(1,572)	(896)
Net cash flows from operating activities		17,440	15,576	17,310	15,534
Cash flows from investing activities
Purchase of property, plant and equipment		(8,669)	(12,066)	(8,669)	(12,066)
Investment in intangible assets		-	(29)	-	(29)
Net proceeds from disposal of  property		21	16	21	16
Repayment of long-term loan by joint venture		150	150	150	150
Movement in short-term investments		(9,720)	2,825	(9,720)	2,825
Net cash flows used in investing activities		(18,218)	(9,104)	(18,218)	(9,104)
Cash flows from financing  activities
Equity dividends paid		(3,102)	(2,907)	(3,049)	(2,895)
Net cash flows used in financing activities		(3,102)	(2,907)	(3,049)	(2,895)
Net (decrease)/increase in cash and cash equivalents		(3,880)	3,565	(3,957)	3,535
Cash and cash equivalents at 1 October		8,636	5,071	8,569	5,034
Net cash and cash equivalents at 30 September		4,756	8,636	4,612	8,569

Consolidated  Statement of Changes in Equity
for the year ended 30 September 2010
		Share capital	Other  reserves	Retained earnings	Total reserves
Group:		£ 000	£ 000	£ 000	£ 000
At 1 October 2009		1,532	1,726	126,074	129,332
Profit for the year		-	-	12,315	12,315
Unrealised loss on hedges (net of tax)		-	(970)	-	(970)
Actuarial gain on defined benefit scheme (net of tax)		-	-	4,056	4,056
Equity dividends		-	-	(3,049)	(3,049)
At 30 September 2010		1,532	756	139,396	141,684
At 1 October 2008		1,532	2,556	130,928	135,016
Profit for the year		-	-	7,204	7,204
Unrealised loss on hedges (net of tax)		-	(830)	-	(830)
Actuarial loss on defined benefit scheme (net of tax)		-	-	(9,163)	(9,163)
Equity dividends		-	-	(2,895)	(2,895)
At 30 September 2009		1,532	1,726	126,074	129,332
Company:
At 1 October 2009		1,532	1,726	127,988	131,246
Profit for the year		-	-	12,267	12,267
Unrealised loss on hedges (net of tax)		-	(970)	-	(970)
Actuarial gain on defined benefit scheme (net of tax)		-	-	4,056	4,056
Impairment of investment		-	-	(280)	(280)
Equity dividends		-	-	(3,049)	(3,049)
At 30 September 2010		1,532	756	140,982	143,270
At 1 October 2008		1,532	2,556	132,821	136,909
Profit for the year		-	-	7,204	7,225
Unrealised loss on hedges (net of tax)		-	(830)	-	(830)
Actuarial loss on defined benefit scheme (net of tax)		-	-	(9,163)	(9,163)
Equity dividends		-	-	(2,895)	(2,895)
At 30 September 2009		1,532	1,726	127,988	131,246

Notes to the accounts

Year ended 30 September 2010

1.   Basis of Preparation

The consolidated financial statements of Jersey Electricity plc, for the year ended 30 September 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union (EU), including International Accounting Standards (IAS) 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 Company expects to publish full financial statements that comply with IFRS in early 2011. 

The Company has considerable financial resources and as a consequence, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The directors have a reasonable expectation that the Company 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:
	2010	2010	2010		2009	2009	2009
	External	Internal	Total		External	Internal	Total
	£000	£000	£000		£000	£000	£000
Revenue			)9
Energy	74,475	281	74,756		73,123	267	73,390
Building Services	4,283	237	4,520		3,569	184	3,753
Retail	14,410	50	14,460		12,954	60	13,014
Property	2,619	696	3,315		1,840	691	2,531
Other	3,102	655	3,757		2,108	574	2,682
	98,889	1,919	100,808		93,594	1,776	95,370
Inter-Segment elimination			(1,919)				(1,776)
Revenue			98,889				93,594
Operating profit
Energy			7,742				6,679
Building Services			240				176
Retail			465				292
Property			1,858				1,263
Other			1,539				404
Operating profit before property revaluation			11,844				8,814
Revaluation of investment properties			2,391				(106)
Group operating profit			14,235				8,708

 

END

 

 

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