REG - Northern ElectricFin - Half-year Report

Berkshire HathawayAnnouncement

15/09/2020 16:05

RNS Number : 0767Z
  
Northern Electric Finance PLC
  
15 September 2020
  
 

 
 
 
 
 
NORTHERN ELECTRIC FINANCE plc
HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2020
 

 

 
Cautionary Statement
This interim management report has been prepared solely to provide additional information to shareholders to assess the business of Northern Electric Finance 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 group of companies (the "Northern Powergrid Group") and is a subsidiary of Northern Powergrid (Northeast) plc. The Company's principal activity during the six months to 30 June 2020 was to act as the issuer of long-term bonds.
 
Results for the six months ended 30 June 2020
During the period ended 30 June 2020, the Company made a loss after tax of £0.1 million (period ended 30 June 2019: loss of £0.1 million).
 
Income statement
Investment income and finance costs were £1.7 million higher than  the same period in the prior year due to the new debt issued in May 2019 and subsequent loan to Northern Powergrid (Northeast) plc, the immediate parent company.
 
Cash flow
Cash equivalents as at 30 June 2020 were £1.5 million lower than the position at 31 December 2019 due to interest paid in the period.
 
Financial position
The loss after tax at £0.1 million was in line with the same period in the prior year.
 
Related party transactions
Details of the related party transactions entered into by the Company and changes therein are included in Note 5 to this half-yearly financial report.
 
Dividends
No ordinary dividends were paid in the period such that reserves were reduced by the loss of £0.1 million.
 
Risks and uncertainties
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 2019, which is available at www.northernpowergrid.com. 
 
It is anticpated that these risks will continue to be the principal risks facing the business for the remaining six months of 2020.
 
Going concern
In the Company's latest annual reports and accounts for the year to 31 December 2019 the directors set out a number of factors taken into account when considering continuing to adopt the going concern basis in preparing that annual report and accounts.
 
The directors confirm that no events have occurred during the six months to 30 June 2020, which alter the view expressed in the Company's annual report and accounts for the year to 31 December 2019.
Future strategy and objectives
The Company will continue to act as the issuer of long-term debt securities.
 
Responsibility Statement
The 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 2020; 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 E Fielden
Director
 
10 September 2020

 

 




 


 


Six months ended 30 June 2020


 


Six months ended 30 June 2019


 




 


 


(unaudited)


 


(unaudited)


 




 


 


£m


 


£m


 




CONTINUING OPERATIONS


 


 


 


 


 




Finance income


 


10.6


 


8.9


 




Finance costs


 


(10.7)


 


(9.0)


 




 


 


 


 


 


 




LOSS BEFORE INCOME TAX


 


(0.1)


 


(0.1)


 




 


 


 


 


 


 




Income tax


 


-


 


-


 




 


 


 


 


 


 




LOSS FOR THE PERIOD


 


(0.1)


 


(0.1)


 




 
 
 
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2020
 
There is no other comprehensive income for the Company for the six months to 30 June 2020 or the comparative six month period in 2019 other than the losses reported above.

 

 




 


30 June 2020


 


31 December 2019 




 


(unaudited)


 


 




 


£m


 


£m




ASSETS


 


 


 




NON-CURRENT ASSETS


 


 


 




Trade and other receivables


295.7


 


295.7




 


 


 


 




CURRENT ASSETS


 


 


 




Trade and other receivables


109.3


 


106.0




Cash and cash equivalents


-


 


1.5




 


 


 


 




 


109.3


 


107.5




 


 


 


 




TOTAL ASSETS


405.0


 


403.2




 


 


 


 




EQUITY


 


 


 




SHAREHOLDERS' EQUITY


 


 


 




Called up share capital


0.1


 


0.1




Retained earnings


(1.9)


 


(1.8)




 


 


 


 




TOTAL EQUITY


(1.8)


 


(1.7)




 


 


 


 




LIABILITIES


 


 


 




NON-CURRENT LIABILITIES


 


 


 




Borrowings


295.7


 


295.7




 


 


 


 




 


295.7


 


295.7




 


 


 


 




CURRENT LIABILITIES


 


 


 




Borrowings


111.1


 


109.1




Trade Payable


-


 


0.1




 


 


 


 




 


111.1


 


109.2




 


 


 


 




TOTAL LIABILITIES


406.8


 


404.9




 


 


 


 




TOTAL EQUITY AND LIABILITIES


405.0


 


403.2




 


 


 


 




 


 


 


 




The half-yearly financial statements were approved by the board of directors and authorised for issue on 10 September 2020 and were signed on its behalf by:
 
 
 
 
T E Fielden
Director
 

 

 




 


 


 


 


 


 




 


Share


 


Retained


 


Total




 


Capital


 


Earnings


 


Equity




 


£m


 


£m


 


£m




 


 


 


 


 


 




 
Balance at 1 January 2020 


0.1


 


(1.8)


 


(1.7)




 
Comprehensive income for the period (unaudited)


-


 


(0.1)


 


(0.1)




 


 


 


 


 


 




Balance at 30 June 2020 (unaudited)


0.1


 


(1.9)


 


(1.8)




 
 




 


 


 


 


 


 




 


Share


 


Retained


 


Total




 


Capital


 


Earnings


 


Equity




 


£m


 


£m


 


£m




 


 


 


 


 


 




 
Balance at 1 January 2019


0.1


 


(1.7)


 


(1.6)




 
Comprehensive income for the period (unaudited)


-


 


(0.1)


 


(0.1)




 


 


 


 


 


 




Balance at 30 June 2019
(unaudited)


0.1


 


(1.8)


 


(1.7)




 
 




 


 


 


 


 


 




 


Share


 


Retained


 


Total




 


Capital


 


Earnings


 


Equity




 


£m


 


£m


 


£m




 


 


 


 


 


 




 
Balance at 1 January 2019


0.1


 


(1.7)


 


(1.6)




 
Comprehensive income for the period 


-


 


(0.1)


 


(0.1)




 


 


 


 


 


 




Balance at 31 December 2019


0.1


 


(1.8)


 


(1.7)





 

 
 




 


6 Months ended 30 June 2020


 


6 Months ended 30 June 2019


 




 


(unaudited)


 


(unaudited)


 




 


£m


 


£m


 




 


 


 


 


 




Profit before income tax


(0.1)


 


(0.1)


 




Finance costs


10.7


 


9.0


 




Finance income


(10.6)


 


(8.9)


 




 


 


 


 


 




Cash generated from operations 


-


 


-


 




 


 


 


 


 




Net interest paid


(5.0)


 


(5.1)


 




 


 


 


 


 




Net cash used in operating activities


(5.0)


 


(5.1)


 




 


 


 


 


 




Investing activities


 


 


 


 




Loan to related party


-


 


(147.4)


 




 


 


 


 


 




Net cash used in investing activities


-


 


(147.4)


 




 


 


 


 


 




Financing activities


 


 


 


 




Issue of long-term debt


-
 


 


147.4


 




Movement in loan from group undertakings


3.5


 


3.6


 




 


 


 


 


 




Net cash generated from financing activities


3.5


 


151.0


 




 


 


 


 


 




 


 


 


 


 




Net decrease in cash equivalents


(1.5)


 


(1.5)


 




 


 


 


 


 




Cash and cash equivalents at beginning of period


1.5


 


1.5


 




 


 


 


 


 




Cash and cash equivalents at end of period


-


 


-


 




 
 

 

1.      GENERAL INFORMATION
 
The information included within these condensed financial statements that refer to the year ended 31 December 2019 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 European Union. 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 European Union.
 
Going concern
In the Company's latest annual report and accounts for the year to 31 December 2019 the directors set out a number of factors taken into account when considering continuing to adopt the going concern basis in preparing that annual report and accounts.
 
The directors confirm that no events have occurred during the six months to 30 June 2020, which alter the view expressed in the Company's annual report and accounts for the year to 31 December 2019.
 
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 2019.
 
 
 
Application of new and revised IFRS
 
None of the standards, interpretations and amendments which are effective for periods beginning 1 January 2020 has had a material effect on the financial statements:
·  Amendments to IFRS 3 - Definition of a Business;
·  Amendments to IAS 1 and IAS 8- Definition of Material;
·  Amendments to References to the Conceptual Framework in IFRS Standards; and
·  Amendments to IFRS 9 Financial instruments- Hedging
 
3.      INCOME TAX EXPENSE
 
Tax for the six month period to 30 June 2020  is charged at 19.00% (six months ended 30 June 2019: 19.00%), 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.
 
Finance Bill 2016 included provisions to reduce the main rate of corporation tax to 17% from 1 April 2020. However, in the March 2020 Budget it was announced that the cut in the rate to 17% will now not occur and the Corporation Tax Rate will be held at 19%. This was substantively enacted through the Provisional Collection of Taxes Act on 17 March 2020.
 
 
 
4.      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 2020


 


31 December 2019


 


30 June 2020


 


31 December 2019




 


(unaudited)


 


 


 


(unaudited)


 


 




 


£m


 


£m


 


£m


 


£m




Financial assets


 


 


 


 


 


 


 




Amounts owed by group undertakings


405.0


 


401.7


 


515.3


 


482.0




Cash and cash equivalents


-


 


1.5


 


-


 


1.5




 


405.0


 


403.2


 


515.3


 


483.5




 


 


 


 


 


 


 


 




Financial liabilities


 


 


 


 


 


 


 




Intercompany short-term loan


3.6


 


-


 


3.6


 


-




2020 - 8.875% bonds


106.2


 


101.7


 


106.2


 


101.8




2035 - 5.125% bonds


149.2


 


153.2


 


217.0


 


213.6




2049 - 2.750% bonds


147.8


 


149.9


 


183.0


 


163.5




 


406.8


 


404.8


 


509.8


 


478.9




 
  

5.         RELATED PARTY TRANSACTIONS
 
Transactions entered into with related parties and balances outstanding were as follows:
 




 


Interest received from related parties


 


Borrowings owed (to)/from related parties




 


£m


 


£m




Related party


 


 


 




Six months ended 30 June 2020 (unaudited):


 


 


 




Northern Powergrid (Northeast) plc


10.6


 


405.0




Yorkshire Electricity Group plc


-


 


(3.6)




 


 


 


 




 


10.6


 


401.4




 


 


 


 




Six months ended 30 June 2019 (unaudited):


 


 


 




Northern Powergrid (Northeast) plc


8.9


 


405.2




Yorkshire Electricity Group plc


-


 


(3.3)




 


 


 


 




 


8.9


 


401.9




 


 


 


 




Year ended 31 December 2019:


 


 


 




Northern Powergrid (Northeast) plc


19.6


 


401.7




Yorkshire Electricity Group plc


-


 


1.5




 


 


 


 




 


19.6


 


403.2




 


 


 


 




Interest on loans to/from companies within the Northern Powergrid Group is charged at a commercial rate of interest.
 
 

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