REG - Jersey Electricity - Annual Financial Report
20/12/2022 16:30
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221220:nRST3756Ka&default-theme=true
RNS Number : 3756K Jersey Electricity PLC 20 December 2022
JERSEY ELECTRICITY plc
Financial Results Summary
Year Ended 30 September 2022
At a meeting of the Board of Directors held on 20 December 2022, the final
accounts for the year ended 30 September 2022 were approved and have been
published on our website (www.jec.co.uk).
The financial information set out in this summary does not constitute the
statutory accounts for the year ended 30 September 2022, or 2021, but is
derived from those accounts. Statutory accounts for 2021 have been delivered
to the Jersey Registrar of Companies, and those for 2022 will be delivered in
early 2023. The auditor reported on the accounts for both years and their
reports were unmodified.
A final dividend of 10.80p on the Ordinary and 'A' Ordinary shares in respect
of the year ended 30 September 2022 was recommended (2021: 10.20p). Together
with the interim dividend of 7.60p (2021: 7.20p) the proposed total dividend
declared for the year was 18.40p on each share (2021: 17.40p).
The final dividend will be paid on 23 March 2023 to those shareholders
registered on 16 February 2023. A dividend on the 5% cumulative participating
preference shares of 1.5% (2021: 1.5%) payable on 3 July 2023 was also
recommended.
The Annual General Meeting will be held on 8 March 2022 at 2.00 pm at the
Powerhouse, Queen's Road, St Helier, Jersey.
M.P.
Magee
Finance
Director
Direct telephone number: 01534
505201
Email: mmagee@jec.co.uk (mailto:mmagee@jec.co.uk)
20 December 2022
The Powerhouse
PO Box 45
Queens Road
St Helier
Jersey JE4 8NY
JERSEY ELECTRICITY plc
Financial Results Summary
Year ended 30 September 2022
The Chair, Phil Austin, comments:
The turmoil that beset international energy markets in late 2021 has
intensified further due to the escalating conflict between Russia and Ukraine,
leading to a previously unthinkable global energy crisis. This has presented
major new challenges to energy companies post the pandemic, sending wholesale
prices soaring and threatening supply security throughout Europe. Jersey
Electricity is not immune to these challenges, but we have shown resilience,
returning a strong Group performance and protecting our customers from the
huge retail price rises seen elsewhere, without Government intervention.
PERFORMANCE
Group revenue for the year at £117.4m was 1% lower than last year and profit
before tax was £10.6m against £19.1m in 2021. If the non-cash upside from
the revaluation of investment properties is excluded in both years, the
underlying year-on-year profit before tax is £9.6m against £13.0m in 2021, a
fall of 26%. This year's financial performance reflects the effects of
COVID-19 post the pandemic. Coupled with a mild winter, a return to more
normal patterns of work and behaviour has reduced demand, with both unit
volume sales in Energy, and Retail revenues, down on last year as electricity
consumption and Powerhouse product sales returned to historical levels. The
Board has recommended a final dividend for the year of 10.80p, a 6% rise on
the previous year, payable on 23 March 2023. Our target return on assets
continues to be 6%-7% over the long term and was 4.2% this year, but 6.2% on a
rolling five-year basis.
ENERGY MARKETS
Elsewhere, the scale of the energy crisis has prompted Governments across
Europe to intervene, each in their own way, to mitigate the impact of the
rising prices on their citizens. In the UK, such Government intervention
averted a proposed 80% year-on-year increase in energy prices in October when
Ofgem was due to raise the regulated price cap to £3,549. The new Energy
Price Guarantee now limits this cap to £2,500 a year until April 2023 when
the cap will be increased to £3,000, prompting a further 20% price rise.
Although our hedging and risk mitigation policies have so far sheltered Jersey
customers from such material price increases, we are not immune to these
market forces. We therefore implemented a 4% tariff rise from 1 January 2022
and a further 5% increase from 1 July 2022, at which time we announced a
further 5% tariff increase effective from 1 January 2023 to give our customers
some degree of certainty for the coming winter period.
CLIMATE CHANGE
Despite the current challenges presented by the global energy crisis, climate
change remains the biggest challenge we all face. We remain optimistic about
the future, however, and the opportunities a net-zero Jersey will bring. Our
low-carbon, Smart-enabled grid provides a strong platform to support the
Government of Jersey's net-zero 2050 carbon ambitions. In addition, increased
digitalisation of our systems is enabling us to map scenarios and calculate
the investment needed in the network. Publication of the Government's Carbon
Neutral Roadmap in May gives us confidence to make these investments and
ensure we are well-placed to meet future challenges.
In April 2022, the UK became the first G20 country to introduce legislation
making it mandatory for large businesses to disclose climate-related financial
information in line with the Taskforce on Climate-related Financial
Disclosures (TCFD) recommendations. Jersey Electricity supports these
recommendations and is working towards full compliance.
ENERGY SECURITY
Although last year's French fishing dispute, which raised questions about
energy sovereignty and the security of imported power supplies, has been
resolved, the global energy crisis has kept us focused on the issue. To
mitigate the supply security threats the energy crisis is causing in Europe,
from where we imported 95% of our power this year, we have modelled various
scenarios and evaluated our mitigations for technical failures to the
submarine cables and other disruptions to supply. We have also established
contingency plans to implement increased local emergency generation if
required.
To increase energy sovereignty longer term, we are reviewing our energy
sourcing strategies, with more detailed investigations into the viability of
offshore wind generation which has fallen significantly in cost.
IN CONCLUSION
I would like to thank our entire 'JE family' for their hard work, commitment
and dedication this past year which has presented renewed challenges post
COVID-19. I am immensely proud of what we have achieved together and the
progress we have made on the course we have set. I also thank my fellow Board
members for their hard work and commitment, and our shareholders for their
support. I remain confident the Company and its people can take advantage of
the opportunities the future holds and meet the challenges it will demand of
us all.
Financial Highlights 2022 2021
Revenue £117.4m £118.6m
Profit before tax £10.6m £19.1m
Earnings per share 27.17p 52.73p
Dividend paid per share 17.80p 16.90p
Final proposed dividend per share 10.80p 10.20p
Net cash £17.4m £13.1m
Group revenue for the year to 30 September 2022 at £117.4m was 1% lower than
in the previous financial year. Energy revenues at £89.7m were marginally
lower than the £89.8m achieved in 2021. Lower unit sales of electricity were
linked to a milder winter and the positive uplift from increased home working,
due to COVID-19, in the previous year. This was offset by a 4% tariff rise
from January 2022 and a 5% rise from 1 July 2022. Revenue in the Powerhouse
retail business decreased 6% from £19.8m in 2021 to £18.7m. Revenue in the
Property business at £2.3m was at the same level as last year. Revenue from
JEBS, our building services business, remained at the same level as 2021 at
£3.4m. Revenue in our other businesses at £3.3m, was in line with the prior
year.
Cost of sales at £77.2m was £3.1m higher than last year with an increase in
wholesale electricity prices offset by the lower revenue level in our
Powerhouse Retail business.
Operating expenses at £29.3m were £0.7m lower than last year. The fall is
largely due to £1.8m incurred in the previous financial year for a non-cash
ex-gratia award for pensions in service, in our defined benefits pension
offset by the increased spend in systems and people, associated with the
de-carbonisation vision for the Island.
Profit before tax for the year to 30 September 2022 was £10.6m against
£19.1m in 2021. However, if the non-cash upside from revaluation of
investment properties is excluded in both years the underlying year on-year
profit before tax was £9.6m in 2022 against £13.0m in 2021, a decrease of
26%.
Profit in our Energy business, at £7.5m, was below the £10.7m achieved in
2021, largely due to lower unit sales volumes. Our target return on assets
employed continues to be in the 6%-7% range over the longer-term and was 4.2%
in 2022 against 5.9% in 2021, but 6.2% on a rolling 5-year basis. Unit sales
volumes decreased by 4% from 639m to 613m kilowatt hours, due to milder than
normal weather, combined with the previous year having benefited from
home-working linked to the pandemic. In the financial year we imported 95.3%
of our requirements from France (2021: 95.2%) and generated 0.3% of our
electricity on-Island from our solar and diesel plant (2021: 0.4%). The
remaining 4.4% (2021: 4.4%) of our electricity was purchased from the local
Energy from Waste plant. A customer tariff rise of 4% was instigated on 1
January 2022 and a subsequent 5% increase took place in July 2022 and notice
was given that a further 5% rise would take place on 1 January 2023.
The £1.4m profit in our Property division, excluding the impact of investment
property revaluation, was at the same level as last year. Our investment
property portfolio moved up in value by £1.0m to £28.8m, based on advice
from our external consultants, who review the position annually. This increase
compared to £6.1m in the 2020/21 financial year was due primarily to a
restructuring of the lease arrangement for our largest tenant, whereby the
existing break clause was moved to a later date, post commercial discussions,
which materially moved the valuation upwards. The increase in this financial
year was due to continued buoyant market conditions in the residential sector.
Our Powerhouse retail business saw profits fall 23% from £1.5m to £1.2m.
However, this is in the context that in the previous financial year profits
rose by 30% by when COVID-19 continued to influence the behaviours, and
spending patterns of local customers, for example, due to less travel taking
place over that year.
JEBS, our building services unit, produced a profit of £0.3m, being
marginally ahead of 2021.
Our other business units (Jersey Energy, Jendev, Jersey Deep Freeze and fibre
optic lease rentals) produced profits of £0.5m being £0.1m lower than last
year.
The net interest cost in 2022 was £1.3m being £0.1m lower than 2021 due to a
higher level of interest received on deposits. The taxation charge at £2.1m
was lower than the previous year, due to lower profits.
Group basic and diluted earnings per share, at 27.17p, compared to 52.73p in
2021 due to decreased profitability.
Dividends paid in the year, net of tax, rose by 5%, from 16.90p in 2021 to
17.80p in 2022. The proposed final dividend for this year is 10.80p, a 6% rise
on the previous year. Dividend cover, at 1.6 times, was lower than the
comparable 3.1 times in 2021 due mainly to the large non-cash increase in the
revaluation of investment properties in 2021.
Net cash flows from operating activities at £21.2m was £1.2m lower than in
2021. Investing activities, at £11.1m was £1.9m higher than £9.2m last
year. Dividends paid were £5.5m compared to £5.3m in 2021. The resultant
position was that net cash at the year-end was £17.4m, being £30.0m of
borrowings offset by £47.4m of cash and cash equivalents, which was £4.3m
more than last year.
Consolidated Income Statement 2022 2021
For the year ended 30 September 2022 £000 £000
Revenue 117,421 118,608
Cost of sales (77,242) (74,159)
Gross Profit 40,179 44,449
Revaluation of investment properties 1,020 6,055
Operating expenses (29,293) (29,991)
Group operating profit 11,906 20,513
Finance income 218 112
Finance costs (1,523) (1,540)
Profit from operations before taxation 10,601 19,085
Taxation (2,135) (2,794)
Profit from operations after taxation 8,466 16,291
Attributable to:
Owners of the Company 8,326 16,155
Non-controlling interests 140 136
8,466 16,291
Earnings per share
- basic and diluted 27.17p 52.73p
Consolidated Statement of Comprehensive Income 2022 2021
£000 £000
Profit for the year 8,466 16,291
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain on defined benefit scheme 8,976 14,803
Income tax relating to items not reclassified (1,795) (2,961)
7,181 11,842
Items that may be reclassified subsequently to profit or loss:
Fair value gain/(loss) on cash flow hedges 4,815 (3,116)
Income tax relating to items that may be reclassified (963) 623
3,852 (2,493)
Total comprehensive income for the year 19,499 25,640
Attributable to:
Owners of the Company 19,359 25,504
Non-controlling interests 140 136
19,499 25,640
Consolidated Balance Sheet as at 30 September 2022
2022 2021
£ 000 £ 000
NON-CURRENT ASSETS
Intangible assets 967 933
Property,plant and equipment 216,235 216,550
Right of use assets 3,280 3,113
Investment properties 28,830 27,810
Trade and other receivables 300 308
Retirement benefit asset 26,434 18,761
Derivative financial instruments 2,640 108
Other investments 5 5
Total non-current assets 278,691 267,588
CURRENT ASSETS
Inventories 7,173 6,909
Trade and other receivables 19,934 18,000
Derivative financial instruments 483 -
Cash and cash equivalents 47,397 43,136
Total current assets 74,987 68,045
Total assets 353,678 335,633
LIABILITIES
Trade and other payables 21,043 18,373
Current tax liabilites 2,088 3,020
Lease liabilities 69 72
Derivative financial instruments 330 1,256
Total current liabilities 23,530 22,721
NET CURRENT ASSETS 51,457 45,324
NON-CURRENT LIABILITIES
Trade and other payables 25,162 24,006
Lease liabilities 3,251 3,035
Derivative financial instruments - 874
Financial liabilities - preference shares 235 235
Borrowings 30,000 30,000
Deferred tax liabilities 32,126 29,321
Total non-current liabilities 90,774 87,471
Total liabilities 114,304 110,192
Net assets 239,374 225,441
EQUITY
Share capital 1,532 1,532
Revaluation reserve 5,270 5,270
ESOP reserve (38) (79)
Other reserves 2,234 (1,618)
Retained earnings 230,232 220,178
Equity attributable to owners of the company 239,230 225,283
Non-controlling interests 144 158
Total equity 239,374 205,039
Consolidated Statement of Changes in Equity for the year ended 30 September
2022
Share Revaluation ESOP *Other Retained Total
capital reserve reserve reserves earnings
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
At 1 October 2021 1,532 5,270 (79) (1,618) 220,178 225,283
Total recognised income and expense for the year - - - - 8,326 8,326
Amortisation of employee share option scheme - - 41 - - 41
Movement on hedges (net of tax) - - - 3,852 - 3,852
Actuarial gain on defined benefit scheme (net of tax) - - - - 7,181 7,181
Equity dividends - - - - (5,453) (5,453)
At 30 September 2022 1,532 5,270 (38) 2,234 230,232 239,230
At 1 October 2020 1,532 5,270 (120) 875 197,359 204,916
Total recognised income and expense for the year - - - - 16,155 16,155
Amortisation of employee share option scheme - - 41 - - 41
Movement on hedges (net of tax) - - - (2,493) - (2,493)
Actuarial gain on defined benefit scheme (net of tax) - - - - 11,842 11,842
Equity dividends - - - - (5,178) (5,178)
At 30 September 2021 1,532 5,270 (79) (1,618) 220,178 225,283
Consolidated Statement of Cash Flows 2022 2021
for the year ended 30 September 2022 £000 £000
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 11,906 20,513
Depreciation and amortisation charges 11,094 10,924
Share based reward charges 41 41
Gain on revaluation of investment property (1,020) (6,055)
Pension operating charge less contributions paid 1,303 3,357
Deemed interest income from hire purchase arrangements 50 -
Profit on sale of property, plant and equipment (7) (6)
Operating cash flows before movement in working capital 23,367 28,774
Working capital adjustments:
Increase in inventories (257) (881)
Increase in trade and other receivables (1,926) (2,263)
Increase in trade and other payables 4,444 904
Net movement in working capital 2,261 (2,240)
Interest paid (1,380) (1,395)
Preference dividends paid (9) (9)
Income taxes paid (3,020) (2,742)
Net cash flows from operating activities 21,219 22,388
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (11,001) (8,513)
Investment in intangible assets (319) (805)
Deposit interest received 168 112
Net proceeds from disposal of fixed assets 7 6
Net cash flows used in investing activities (11,145) (9,200)
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid (5,453) (5,178)
Dividends paid to non-controlling interest (154) (101)
Repayment of lease liabilities (206) (297)
Net cash flows used in financing activities (5,813) (5,576)
Net increase in cash and cash equivalents 4,261 7,612
Cash and cash equivalents at beginning of year 43,136 35,520
Effect of foreign exchange rates - 4
Cash and cash equivalents at end of year 47,397 43,136
Notes to the accounts
Year ended 30 September 2022
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc, for the year
ended 30 September 2022, 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). This is
consistent with the accounting policies in the 30 September 2021 annual report
and accounts and the 31 March 2022 interim report.
While the financial information included in this summary 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. Full financial statements that comply with IFRS have
additionally been published on our website; www.jec.co.uk.
Segmental information
Revenue and profit information are analysed between the business segments as
follows:
2022 2022 2022 2021 2021 2021
External Internal Total External Internal Total
£000 £000 £000 £000 £000 £000
Revenue
Energy 89,683 100 89,783 89,780 100 89,880
Building Services 3,365 780 4,145 3,399 645 4,044
Retail 18,695 41 18,736 19,808 68 19,876
Property 2,345 639 2,984 2,304 645 2,949
Other* 3,333 625 3,958 3,317 945 4,262
117,421 2,185 119,606 118,608 2,403 121,011
Intergroup elimination (2,185) (2,403)
Revenue 117,421 118,608
Operating profit
Energy 7,502 10,693
Building Services 266 217
Retail 1,174 1,533
Property 1,436 1,393
Other* 508 622
10,886 14,458
Revaluation of investment properties 1,020 6,055
Operating profit 11,906 20,513
*Other segment includes the divisions of Jersey Energy and Jendev as well as
Jersey Deep Freeze Limited, the Group's sole subsidiary.
Materially, all the Group's operations are conducted within the Channel
Islands. All transfers between divisions are on an arms-length basis.
The revaluation of investment properties is shown separately from Property
operating profit as this income is reflected solely by a movement in reserves.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR URANRUOUUUAARecent news on Jersey Electricity
See all newsREG - Jersey Electricity - Result of AGM
AnnouncementREG - Jersey Electricity - Notice of AGM
AnnouncementREG - Jersey Electricity - Notice of Annual General Meeting
AnnouncementREG - Jersey Electricity - Final Results Summary
AnnouncementREG - Jersey Electricity - Director/PDMR Shareholding
Announcement