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Jersey Electricity (JEL)

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Tuesday 20 May, 2003

Jersey Electricity

Interim Results

Jersey Electricity Company Limited
20 May 2003

                         The Jersey Electricity Company
                   preliminary announcement of Interim Results
                     for the six months ended 31 March 2003

At a meeting of the Board of Directors held on 19 May 2003, the Board approved
the Interim Statements for the Group for the six months ended 31 March 2003 and
declared an interim dividend of 41p (32.8p net of tax) compared to 37p gross
(29.6p net) in 2002 on the Ordinary and 'A' Ordinary shares. The dividend will
be paid on 29 August 2003 to those shareholders registered in the books of the
Company on 15 August 2003.

The Interim Statements follow herewith and will be sent to all shareholders in
due course, following which, copies will be made available to the public at the
Company's registered office, Queens Road, St Helier, Jersey, JE4 8NY.

P.J. Routier
Company Secretary

Direct telephone number: 01534 505253
Direct fax number: 01534 505553
Email: proutier@jec.co.uk

20 May 2003

The Powerhouse,
PO Box 45,
Queens Road,
St Helier,
Jersey JE4 8NY


                                                  Directors' Statement


Financial Summary                                   6 months  2003       6 months 2002      % rise/(reduction)
--------------------------------------------------------------------------------------------------------------
Electricity sales - kWh (000)                           327,190             316,590                 3%
Group turnover                                          £32.7m              £32.5m                  1%
Profit before tax                                        £4.1m               £2.8m                  46%
Earnings per share                                       £2.06               £1.34                  54%
Gross dividend per ordinary share                         41p                 37p                   11%
Cash generated in the 6 month period                     £0.3m               £4.4m                 (93)%
--------------------------------------------------------------------------------------------------------------


Profit margins continued recent years' trend of recovery to industry norms. At
£4.1m for the first half of 2003 it was 46% higher than in the same period last
year as electricity sales resumed their pattern of strong growth and costs were
reduced by increased electricity importation.

Effective from December 2002, the commercial terms of a new three-year supply
agreement benefited from our first opportunity to exploit emerging competition
in the European electricity market, enabling power imports to increase to 97% of
the electricity we supplied.  This, together with the effectiveness of our Euro
price hedging mechanism, allowed the renewal of our pledge for the third
successive year not to increase electricity prices, irrespective of continuing
volatility in World oil markets and sustained high inflation in the Jersey
economy. The resulting competitive advantage at a time of escalating gas and
heating oil prices is evidenced by strong growth in our market share.

Profits in our Contracting business have been falling in recent years as
cost-of-living wage increases in Jersey's labour market have undermined its
ability to compete with overseas contractors attracted to Jersey's buoyant
construction market. In view of this trend, losses of £0.3m to the half-year and
a poor forward order book, the Contracting business will be rationalised by year
end. Notice has been given of redundancies that, together with restructuring
costs, are expected to cost £1m in the second half.

We achieved a 17% increase in profits from our Electrical Retailing business to
£0.2m with gross margins being maintained and lower overheads negating a 2%
reduction in 'like for like' sales. Profits from our Property portfolio grew by
12% to £0.5m in the first half, reflecting increased rentals from our Internet
Data Centre. Our joint venture company Foreshore Limited performed to
expectations, with our 50% share of start-up losses held at £0.3m. Losses at our
associated telecommunications company Newtel Limited remained unchanged at £0.3m
as it prepares to exploit Public Telecommunications Operators Licences awarded
this year by the competition authorities in Jersey and Guernsey.

As a result of consultation with all affected parties throughout the last six
months, the Company proposes to inject a lump sum of £7m into its occupational
Pension Scheme in the second half-year, to eliminate approximately half of the
current deficit. It also proposes to increase its contribution rate from the
current 14% to around 20% of employees' salaries. The presumption of continued
cost of living rises to existing pensioners which have previously been made on a
discretionary basis, accounted for £11m of the deficit as at 30 September 2002
and the Company regrets the need to interrupt this pending recovery of an
acceptable funding position.

Borrowings reduced only slightly from £1.5m to £1.2m during the last six months,
as operating cash produced by trading activity was absorbed by £4.5m of capital
expenditure and the cost of a redundancy programme within our power generation
business, announced last year, in anticipation of the reduced power plant
operating regime.

Full year results will be impacted by the costs of rationalisation at our
Contracting business and increased pension contributions.  Performance is
however expected to remain strong, enabling continued dividend growth whilst
taking account of imminent cash flow pressures facing the business.  Your Board
proposes to pay a gross dividend of 41p (2002: 37p) on the Ordinary and 'A'
Ordinary Shares payable on 29 August 2003.

D.R. MALTWOOD - Chairman

M.J. LISTON - Managing Director



20 May 2003




                            Consolidated Profit and Loss Account

                           6 months ended   6 months ended    12 months ended
                            31 March 2003    31 March 2002  30 September 2002
                                                                          

Electricity Sales - kWh (000)     327,190          316,590            564,454

                                    £ 000            £ 000              £ 000
Turnover:
Group and share of joint           
venture                            32,967           32,738             60,812
Less: Share of joint venture         
turnover                             (272)            (233)              (461)
                              -----------------------------------------------

Group turnover                     32,695           32,505             60,351
Cost of sales                     (18,620)         (18,781)           (37,510)
                              -----------------------------------------------

Gross profit                       14,075           13,724             22,841

Net operating expenses             (9,327)         (10,101)           (16,999)
Exceptional item -                      
restructuring costs                     -                -             (1,790)
Exceptional item - impairment           
of investment                           -                -             (1,098)
                              -----------------------------------------------

Group operating profit              4,748            3,623              2,954
Share of operating loss in           
joint venture                        (326)            (354)              (661)
Share of associate's operating       
loss                                 (260)            (258)              (503)
                              -----------------------------------------------
Profit on ordinary activities       
before interest payable             4,162            3,011              1,790

Net interest and similar              
charges                               (18)            (175)              (217)
                              -----------------------------------------------

Profit on ordinary activities       
before taxation                     4,144            2,836              1,573

Tax on profit on ordinary            
activities                           (950)            (755)              (782)
                              -----------------------------------------------

Profit on ordinary activities       
after taxation                      3,194            2,081                791

Minority interest                     (36)             (20)               (41)
                              -----------------------------------------------

Profit on ordinary activities       
after taxation and minority
interest                            3,158            2,061                750

Dividends paid and proposed          (502)            (453)            (1,020)
                              -----------------------------------------------
Retained profit/(loss) for the      
Group and share in joint      
venture                             2,656            1,608               (270)
                              ===============================================

Earnings per ordinary share         
(basic and diluted)                 £2.06            £1.34              £0.49
                              ===============================================
Earnings per ordinary share
(basic and diluted)
excluding exceptional items         £2.06            £1.34              £2.14
                              ===============================================



                 Consolidated Balance Sheet as at 31 March 2003



                        6 months ended       6 months ended     12 months ended
                         31 March 2003        31 March 2002        30 Sept 2002

                       £ 000      £ 000     £ 000      £ 000     £ 000      £ 000
Fixed assets
Intangible fixed                    
assets                              162                  202                  182
Tangible fixed                  
assets                          119,196              119,804              119,905
Investments:
Shares                                5                1,103                    5
Share of associate's                
net assets                          306                  489                  566
Joint venture share      
of gross assets          554                  601                  557
Joint venture share     
of gross             
liabilities             (406)                (258)                 (73)
                     -------              -------              -------
Net share of joint                  
venture assets                      148                  343                  484
                               --------             --------             --------
                                119,817              121,941              121,142

Current assets        14,590               11,795               11,496

Current liabilities   (9,327)             (10,529)             (11,078)
                     -------              -------              -------

Net current assets                5,263                1,266                  418
                               --------             --------             --------
Total assets less               
current
liabilities                     125,080              123,207              121,560

Creditors falling       
due after more
than one year           (916)              (1,050)                (961)
Pensions and similar    (432)                (496)                (484)
obligations
Deferred taxation    (12,846)             (12,090)             (11,884)
                     -------             --------             --------

Less non-current                (14,194)             (13,636)             (13,329)
liabilities
                               --------             --------             --------
                                110,886              109,571              108,231
                               ========             ========             ========
Capital and
reserves

Called up share                   1,767                1,767                1,767
capital
Reserves - equity               109,021              107,712              106,402
                              ---------            ---------            ---------
Shareholders'                   110,788              109,479              108,169
funds

Equity - minority                    98                   92                   62
interest                      ---------            ---------            ---------
                                110,886              109,571              108,231
                              =========            =========            =========



                        Consolidated Cash Flow Statement


                                        6 months ended   6 months ended     12 months ended
                                         31 March 2003    31 March 2002        30 Sept 2002
                                                 £ 000            £ 000               £ 000
Reconciliation of operating profit to net
cash inflow from operating activities

Group operating profit                           4,748            3,623               2,954
Depreciation charges                             4,495            3,788               7,676
(Increase)/decrease in stocks & work in            (69)           1,066                 249
progress
(Increase)/decrease in debtors                  (3,025)             (70)              2,204
(Decrease) /increase in creditors                 (727)          (1,803)              1,707
Impairment of investment                             -                -               1,098
                                              ---------------------------------------------

Net cash inflow from operating activities        5,422            6,604              15,888

Returns on investments and servicing of            (18)            (175)               (217)
finance
Taxation                                             -             (157)               (284)
Capital expenditure                             (4,549)          (1,398)             (5,481)
Dividends paid                                    (563)            (490)               (952)
                                              ---------------------------------------------

Increase in cash                                   292            4,384               8,954
                                              =============================================

Reconciliation of net cashflow

Change in net funds                                292            4,384               8,954
Net debt - start of period                      (1,486)         (10,440)            (10,440)
                                              ---------------------------------------------

Net debt - end of period                        (1,194)          (6,056)             (1,486)
                                              =============================================



                       Notes to the Financial Statements
                       for the period ended 31 March 2003

 1. Basis of preparation

The interim statements have been prepared on the basis of the accounting
policies set in the Group 2002 notes to the Financial Statements.

 2. Segmental details



                                           Turnover                          Profit/(loss)
                                                                           before interest and tax
                                       £ 000       £ 000         £ 000        £ 000           £ 000         £ 000
                                6 months to  6 months to 12 months to  6 months to    6 months to   12 months to
                       Notes    31 Mar 2003  31 Mar 2002 30 Sept 2002  31 Mar 2003    31 Mar 2002   30 Sept 2002

Energy                                23,642      22,743        40,954        4,167           2,802         4,238
Contracting                            2,972       3,463         7,557         (349)           (171)           78
Retail Appliance Sales                 3,296       3,619         6,467          182             156           176
Property                                 979         903         1,845          531             473           891
Other                                  1,806       1,777         3,528         (369)           (249)         (705)
                                 --------------------------------------------------------------------------------
                                      32,695      32,505        60,351        4,162           3,011         4,678
                                 =====================================
Exceptional item -          
redundancy costs            3.a                                                   -               -        (1,790)
Exceptional item -          
impairment of
investments                 3.b                                                   -               -        (1,098)
                                                                        -----------------------------------------

Profit on ordinary                                                            
activities before
interest payable                                                              4,162           3,011         1,790
                                                                        =========================================


The information currently available to report the net assets of each business
class as each reportable segment is limited as each business operates as a
division of the Group and therefore in certain instances there is no reasonable
basis to allocate the Group net assets to each business class. On a geographical
basis, the Group's material operations are conducted within the Channel Islands
area.

3.            Exceptional items

 a. Redundancy costs

The exceptional item in the 12 months to 30 September 2002 of £1,790,000 relates
to the costs of manpower reductions of La Collette power station in Jersey. The
tax benefit arising from this exceptional item is £358,000 giving a net cost for
the year to 30 September 2002 of £1,432,000.

 b. Impairment of investments

The exceptional charge of £1,098,000 in the 12 months to 30 September 2002
relates to the write-down of the Group investment in shares to zero in GoPro
Landsteinar Ehf. following an impairment


                      This information is provided by RNS
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