REG - Jersey Electricity - Annual Financial Report
18/12/2024 18:15
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RNS Number : 6585Q Jersey Electricity PLC 18 December 2024
JERSEY ELECTRICITY Plc
Financial Results Summary
Year Ended 30 September 2024
At a meeting of the Board of Directors held on 18 December 2024, the final
accounts for the year ended 30 September 2024 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 2024, or 2023, but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the Jersey Registrar of Companies, and those for 2024 will be delivered in
early 2025. The auditor reported on the accounts for both years and their
reports were unmodified.
A final dividend of 12.00p on the Ordinary and 'A' Ordinary shares in respect
of the year ended 30 September 2024 was recommended (2023: 11.40p). Together
with the interim dividend of 8.40p (2023: 8.00p) the total dividend declared
for the year was 19.80p on each share (2023: 18.80p).
The final dividend will be paid on 14 March 2025 to those shareholders
registered on 22 February 2025. A dividend on the 5% cumulative participating
preference shares of 1.5% (2023: 1.5%) payable on 1 July 2025 was also
recommended.
The Annual General Meeting will be held on 5 March 2025 at 2.00 pm at the
Powerhouse, Queen's Road, St. Helier, Jersey.
L.G.
Fulton
Chief Financial
Officer
Direct Line: 01534 505270
Mobile Number: 07797
778688
Email:
lfulton@jec.co.uk
18 December 2024
The Powerhouse
PO Box 45
Queens Road
St. Helier
Jersey JE4 8NY
JERSEY ELECTRICITY plc
Financial Results Summary
Year ended 30 September
2024
The Chair, Phil Austin, comments:
One Hundred Years of Service
In this, our centenary year, we have taken time to reflect on the significant
achievements of Jersey Electricity over the past 100 years, from its formation
in 1924 at Albert Pier, to the move to the Queens Road Power Station in 1964,
the formal opening of La Collette in 1973 and the first undersea cable to
France in the mid-1980s - all of these developments followed pivotal and bold
decisions, which have served the Island well. Throughout the last century,
Jersey Electricity has been at the heart of the Island's transformation,
empowering our communities and championing sustainability through resilience
and visionary thinking.
Performance
Whilst, in operational terms, the 2023/24 year got off to a very difficult
start with Storm Ciarán, the performance of the Group, throughout the year,
was a good one.
The ongoing Russia - Ukraine war and the rising tensions in the Middle East
continue to create uncertainty in the energy markets and, despite some easing
during the year, along with falling inflation, they remain unstable and above
historical levels.
Revenue for the Group rose 8.5% in the year to £135.7m, producing a Profit
Before Tax of £15.1m. Unit sales of electricity remained flat, with growth in
connections and fuel switches being offset by efficiencies. Our Energy
Business delivered a Return on Assets of 7.3% in year, delivering an on-target
performance of 6.3% on a rolling five-year basis.
All our other businesses continued to perform in line with expectations.
The Board has recommended a final dividend for the year of 12.00p, a rise of
5.3% on the previous year, payable on 14 March 2025.
Delivering safe, reliable, affordable and sustainable energy services
As the challenge of decarbonisation becomes increasingly urgent due to global
warming, the need to ensure Jersey continues to have a safe, reliable,
affordable, and sustainable energy system becomes all the more imperative.
Jersey Electricity plays a significant role in supporting the Islands' net
zero ambitions and has committed to achieving net zero by 2040. In 2023/24, we
focused on three major areas to ensure these goals are met.
The Big Upgrade, Supply Security and Long-Term Green, Clean Energy all
accelerate this year. The flexibility of the Group's business model allows
investment to be targeted to have the greatest impact on net zero as well as
creating the most values for all stakeholders.
The Big Upgrade and Supply Security
In 2024, we embarked on one of our largest investment programmes for some
time. 'The Big Upgrade' will see JE investing £120m in the electricity
network over the next five years, ensuring our network supports the energy
transition and is sustainable not just today but long into the future.
We also commenced our resilience programme at La Collette, which will notably
enhance the Island's security of supply, and we have also replaced and
upgraded the transformers at Five Oaks, which both bolsters resilience and
reduces environmental impact by lowering noise levels in the
area.
Long Term Green, Clean Energy
Our renewables strategy continues to progress. We are investigating the impact
of an Offshore Wind project for Jersey and assisting the Government when
possible.
In 2023/24, we initiated the Solar 5000 campaign with the objective of
powering 5,000 homes with solar energy by 2030.
The first solar array at St Clement will be commissioned in January 2025. It
will provide approximately 4MW of electricity to the Island and offers
agricultural benefits from the project. We are also continuing to develop our
'Beyond the Meter' services for homes and businesses. Our aim is to develop
products and solutions to enable customers to transition from fossil fuels to
low carbon energy at an affordable cost.
In Conclusion
In looking back over 100 years of operation, it is amazing to see the how the
Company has developed into what it is today - the brave, and sometimes bold,
decisions that were taken along the way, and the life-changing technological
improvements which could never have been anticipated. Throughout all of that,
though, there has been a constant - the dedication, expertise and passion of
our staff to provide the best service possible to our customers, at all times.
For that, we thank employees, past and present. Finally, I would like to
extend my thanks to my fellow Directors for their support and expertise. It is
very much appreciated.
Financial Performance
Financial Highlights 2024 2023
Revenue £135.7m £125.1m
Profit before tax £15.1m £14.9m
Earnings per share 37.92p 36.81p
Dividend paid per share 19.80p 18.80p
Final proposed dividend per share 12.00p 11.40p
Net cash £19.2m £17.4m
In Year Return on Assets 7.3% 7.2%
Return on Assets - 5 year rolling average 6.3% 6.2%
Our financial performance in 2023/24 remains strong, with a healthy balance
sheet supported by high-quality assets. Our power procurement and hedging
strategy has shielded us from the wholesale energy
market volatility in recent years, where prices have soared up to more than
tenfold from the historic prices. Despite the challenges posed by the
macro-economic climate, which have pressurised the cost base, our financial
performance and long-term resilience remains strong.
Group revenue for the year to 30 September 2024 increased year-on-year by
£10.6m (8.5%) due to tariff
price increases in the Energy Business. Revenue across the wider group
remained materially in line with the previous financial year. Group Profit
before tax for the year to 30 September 2024 was £15.1m compared to £14.9m
in 2023. The property revaluation impact decreased by £0.3m from a £1.2m
reduction in 2023, to £0.9m. Profit before tax excluding the property
revaluation and net interest income at £15.3m compared to £15.7m in 2023,
predominately due to slightly reduced profits in the Retail and Property
Businesses.
Energy Business: Operating Profit at £13.0m, is in line with the prior year.
Revenue increased by £11m, following a tariff price increase on 1 January
2024, however, this was offset by a £11m increase in
wholesale energy costs and operating costs. Operating costs increased
year-on-year due to a combination of high inflation and continued investment
in our people, processes and technology to support growth in our capital,
maintenance and IT programmes.
As we embark on our Big Upgrade programme, we have accelerated the replacement
of one of our subsea cables. The cable has seen some deterioration, and the
cable has been impaired, resulting in a £1.5m charge in the year. Our
operating plans have been reviewed should a failure occur and there are no
material increases for future operating costs should this occur.
The Energy Business delivered a Return on Assets (ROA) of 7.3% in year,
compared to 7.2% in 2023. Our target is to deliver between 6%-7% ROA on a
rolling five-year basis. The 2024 rolling 5-year ROA is on target at 6.3%.
Property: The £0.9m profit in our property division, is £0.2m lower than in
2023. In March 2023 one of the commercial spaces at Queens Road was vacated.
The new tenant arrived in April 2024, which accounts for the small
year-on-year reduction in profit.
Powerhouse.je: Profit in our retail business was £0.6m compared to £0.9m in
2023. This was predominantly due to a fall in revenues following a slower than
anticipated year and high inflation affecting storage costs.
JEBS: Profits increased by £0.1m across our building services as the level of
activity returned to expected levels following the temporary reduction in the
pace of fuel switching as the government incentive scheme was being launched.
Other business units: Jersey Energy, Jendev, Jersey Deep Freeze and fibre
optic lease rentals produced combined profits of £0.4m being £0.1m below
last year.
Net interest income was £0.8m in 2024 compared to a net interest income of
£0.3m in 2023.
Taxation at £3.4m was in line with the prior year.
Group basic and diluted earnings per share, at 37.92p, comparable to 36.81p in
2023, rose due to increased profitability. Dividends paid in the year, net of
tax, rose by 5.3%, from 18.80p in 2023 to 19.80p in 2024. The proposed final
dividend for this year is 12.00p, a 5.3% rise on the previous year. Dividend
cover, at 1.9 times is broadly in line with 2023.
Net cash at £19.2m was £1.8m higher than in 2023. This increase was due to
£6.8m increased net cashflows from operating activities (mainly driven by
favourable working capital movements) offset by increased cash in investment
activities of £5m.
2024 2023
£000 £000
Consolidated Income Statement for the year ended 30 September 2024
Revenue 135,742 125,078
Cost of sales (83,184) (80,924)
Rebate of past energy costs - non recurring item - 3,593
Gross profit 52,558 47,747
Movement in valuation of investment properties (890) (1,215)
Operating expenses (37,299) (32,010)
Group operating profit 14,369 14,522
Finance income 2,291 1,871
Finance costs (1,533) (1,528)
Profit from operations before taxation 15,127 14,865
Taxation (3,427) (3,432)
Profit from operations after taxation 11,700 11,433
Attributable to: 11,618 11,280
Owners of the Company
Non-controlling interests 82 153
11,700 11,433
Earnings per share - basic and diluted 37.92p 36.81p
Consolidated Statement of Comprehensive Income for the year ended 30 September 2024 2023
2024
£000 £000
Profit for the year 11,700 11,433
Items that will not be reclassified subsequently to profit or loss: 925 (815)
Actuarial gain/loss on defined benefit scheme
Income tax relating to items not reclassified (185) 163
740 (652)
Items that may be reclassified subsequently to profit or loss: (3,483) (3,361)
Fair value loss on cash flow hedges
Income tax relating to items that may be reclassified 697 672
(2,786) (2,689)
Total comprehensive income for the year 9,654 8,092
9,572 7,939
Attributable to:
Owners of the Company
Non-controlling interests 82 153
9,654 8,092
All results in the year have been derived from continuing operations
Consolidated Balance Sheet as at 30 September 2024
2024 2023
£000 £000
Non-current assets 364 681
Intangible assets
Property, plant and equipment 225,523 216,136
Right of use assets 4,621 3,194
Investment properties 26,725 27,615
Trade and other receivables 300 300
Retirement benefit asset 27,952 25,546
Derivative financial instruments - 129
Other investments 5 5
Total non-current assets 285,490 273,606
Current assets 8,435 9,187
Inventories
Trade and other receivables 24,902 25,959
Derivative financial instruments - 64
Cash and cash equivalents 49,190 47,429
Total current assets 82,527 82,639
Total assets 368,017 356,245
Current Liabilities 23,027 19,459
Trade and other payables
Current tax liabilities 3,413 3,301
Lease liabilities 306 81
Derivative financial instruments 2,601 536
Total current liabilities 29,347 23,377
Net current assets 53,180 59,262
Non-current liabilities 27,222 26,249
Trade and other payables
Lease liabilities 3,878 3,193
Derivative financial instruments 1,451 225
Financial liabilities - preference shares 235 235
Borrowings 30,000 30,000
Deferred tax liabilities 30,923 31,422
Total non-current liabilities 93,709 91,324
Total liabilities 123,056 114,701
Net assets 244,961 241,544
Equity 1,532 1,532
Share capital
Revaluation reserve 5,270 5,270
ESOP reserve (35) (35)
Other reserves (3,241) (455)
Retained earnings 241,391 235,100
Equity attributable to the owners of the Company 244,917 241,412
Non-controlling interests 44 132
Total equity 244,961 241,544
Consolidated Statement of Changes in Equity for the year ended 30 September 2024
Share Capital Revaluation ESOP Other Retained Total
reserve reserve reserves* earnings
£000 £000 £000 £000 £000 £000
At 1 October 1,532 5,270 (35) (455) 235,100 241,412
2023
Total recognised income and expense for the year - - - - 11,618 11,618
Movement on hedges (net of tax) - - - (2,786) - (2,786)
Actuarial gain on defined benefit scheme (net of tax) - - - - 740 740
Equity dividends - - - - (6,067) (6,067)
At 30 September 1,532 5,270 (35) (3,241) 241,391 244,917
2024
At 1 October 1,532 5,270 (38) 2,234 230,232 239,230
2022
Total recognised income and expense for the year - - - - 11,280 11,280
Amortisation of employee share option scheme - - 3 - - 3
Movement on hedges (net of tax) - - - (2,689) - (2,689)
Actuarial loss on defined benefit scheme (net of tax) - - - - (652) (652)
Equity dividends - - - - (5,760) (5,760)
At 30 September 2023 1,532 5,270 (35) (455) 235,100 241,412
*'Other reserves' represents the foreign currency hedging reserve.
Consolidated Statement of Cash Flows for the year ended 30 September 2024
2024 2023
£000 £000
Cash flows from operating activities 14,369 14,522
Operating profit
Depreciation, amortisation and impairment charges 14,181 11,581
Share-based reward charges - 3
Loss on revaluation of investment property 890 1,215
Pension operating charge less contributions paid (1,481) 73
Deemed interest income from hire purchase arrangements 201 183
Loss/(profit) on sale of property, plant and equipment 1 (3)
Operating cash flows before movement in working capital 28,161 27,574
Working capital adjustments:
Decrease/(Increase) in inventories 752 (2,014)
Increase in trade and other receivables (1,133) (3,835)
Increase/(Decrease) in trade and other payables 1,130 (617)
Net movement in working capital 749 (6,466)
Interest paid on borrowings (1,208) (1,368)
Preference dividends paid (9) (9)
Income taxes paid (3,301) (2,089)
Net cash flows from operating activities 24,392 17,642
Cash flows from investing activities (18,036) (13,046)
Purchase of property, plant and equipment
Investment in intangible assets (53) (92)
Deposit interest received 2,090 1,688
Net proceeds from disposal of fixed assets 34 3
Net cash flows used in investing activities (15,965) (11,447)
Cash flows from financing activities (6,067) (5,760)
Equity dividends paid
Dividends paid to non-controlling interest (170) (165)
Repayment of lease liabilities (429) (242)
Net cash flows used in financing activities (6,666) (6,167)
Net increase in cash and cash equivalents 1,761 28
Cash and cash equivalents at the beginning of the year 47,429 47,397
Effect of foreign exchange rate changes - 4
Cash and cash equivalents at the end of the year 49,190 47,429
IAS 7 'Statement of Cash Flows' requires the explanation of both cash and
non-cash movements in assets and liabilities relating to financing activities.
Of the £49.2m cash and cash equivalents at 30 September 2024, £35.0m (2023:
£40.0m) is on fixed term deposits with an average of 93 days remaining (2023:
70 days).
Notes to the accounts
Year ended 30 September 2024
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc, for the year
ended 30 September 2024, 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 2023 annual report
and accounts and the 31 March 2024 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.
The business segments below are those reported to the Directors for the
purposes of resource allocation and performance assessment:
2024 2024 2024 2023 2023 2023
External Internal Total External Internal Total
£000 £000 £000 £000 £000 £000
Revenue
Energy - arising during the course of ordinary business 108,102 100 108,202 97,053 89 97,142
Building Services 3,872 936 4,808 3,349 831 4,180
Retail 17,767 110 17,877 18,514 56 18,570
Property 2,346 639 2,985 2,350 641 2,991
Other* 3,655 112 3,767 3,812 466 4,278
135,742 1,897 137,639 125,078 2,083 127,161
Intergroup elimination (1,897) (2,083)
Revenue 135,742 125,078
13,020 9,329
Operating profit
Energy profit before rebate of past energy costs**
Rebate of past energy costs - 3,593
Energy profit including rebate 13,020 12,922
Building Services 248 162
Retail 618 917
Property 931 1,149
Other* 442 587
15,259 15,737
Revaluation of investment properties (890) (1,215)
Operating profit 14,369 14,522
Finance income 2,291 1,871
Finance costs (1,533) (1,528)
Profit from operations before taxation 15,127 14,865
Taxation (3,427) (3,432)
Profit from operations after taxation 11,700 11,433
Attributable to:
Owners of the Company 11,618 11,280
Non-controlling interests 82 153
11,700 11,433
*The Other segment includes the divisions of Jersey Energy and Jendev,
operating profit from IRU contracts 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.
Revaluation of investment properties is shown separately from Property
operating profit.
Revenues disclosed by the business segments above are recognised both on a
point in time and over time basis. The treatment of revenue recognition in
accordance with IFRS 15.
**During the year ended 30 September 2023, the Company received a credit which
was been disclosed as 'Rebate of past energy costs - non-recurring item'
within gross profit in these financial statements.
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