REG - Jersey Electricity - Annual Information Update <Origin Href="QuoteRef">JLEC.L</Origin>

Jersey ElectricityAnnouncement

18/12/2014 07:26

RNS Number : 1155A
Jersey Electricity PLC
18 December 2014
 
JERSEY ELECTRICITY plc
PreliminaryAnnouncement of Annual Results
Year Ended30September2014
At a meeting of the Board of Directors held on 17 December 2014, the final accounts for the Group for the year to 30 September 2014 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 2014 or 2013, but is derived from those accounts. Statutory accounts for 2013 have been delivered to the Jersey Registrar of Companies and those for 2014 will be delivered in early 2015. The auditor has reported on those accounts and their reports were unmodified. 
A final dividend of 7.20p on the Ordinary and 'A' Ordinary shares in respect of the year ended 30 September 2014 was recommended (2013: 6.80p). Together with the interim dividend of 5.00p the proposed total dividend declared for the year was 12.20p on each share. 
 
The final dividend will be paid on 27 March 2015 to those shareholders registered in the books of the Company on 20 February 2015. A dividend on the 5% cumulative participating preference shares of 1.5% (2013: 1.5%) payable on 1 July 2015 was also recommended.
The Annual General Meeting of the Company will be held on 5 March 2015.
John Stares, who has served as a non-executive director for the last five years will be retiring at our next Annual General Meeting on 5 March 2015. 
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 : mmagee@jec.co.uk Email : proutier@jec.co.uk
17 December 2014 
The Powerhouse
PO Box 45
Queens Road
St Helier
Jersey JE4 8NY 
JERSEY ELECTRICITY plc 
Preliminary Announcement of Annual Results
Year ended 30 September 2014   
The Chairman, Geoffrey Grime,comments :
"2014 was the Company's 90th anniversary and there could be no better way to mark this celebration than with the landmark achievement of the successful installation of our third interconnector to France, Normandie 3 (N3) - under budget and ahead of its 2015 schedule. The N3 project, co-invested under our joint venture with Guernsey Electricity, our partners in the Channel Islands Electricity Grid, has been 10 years in the making and more than doubles our importation capacity which had been severely restricted since June 2012 when our oldest interconnector, EDF1, failed and was removed from service. I said that last year we delivered a foundation for recovery. This year we have built further on this with an expected upward movement in Energy profit, which reached the level of 8.0m on an operating basis, restoring it to pre-2012 levels. Importantly, this profitability reflects the return necessary to support continued investment." 
Financial Summary
2014
2013
(restated)
% change




Revenue
98.4m
102.3m
 (4)%
Profit before tax
 6.5m
 5.4m
21%
Earnings per share
16.10p
 13.27p
 21%
Dividends paid per ordinary share 
11.80p
 11.25p
 5%
The 2013 profit figure was restated downwards by 1.2m to reflect the adoption of a new accounting policy to comply with changes to the revised International Accounting Standard 19, "Employee Benefits", in respect of pension costs as highlighted in our 2013 Annual Report. The original charge of 1.2m in 2013 was restated as 2.4m.
Group revenue for the year to 30 September 2014 at 98.4m was 4% lower than in the previous financial year. Unit sales volumes of electricity were 6% lower than last year due to mild weather with revenues falling 3% to 79.5m as tariff rises reduced the impact of the units shortfall. Turnover in our Retail business decreased by 6% from 12.1m to 11.4m. The floor space utilised by the business was reduced as a substantial proportion was let to an external tenant from May 2014. Revenue in the Property business, including internal sales, fell from 2.9m to 2.6m mainly linked to changes in tenancy arrangements during the year including our disposal of Foreshore. Revenue in Building Services, including internal sales, rose 3% from levels experienced in 2013 to 4.2m. Turnover in our Other Businesses, including internal sales, remained at 3.2m. 
Profit before tax for the year to 30 September 2014 rose 21% to 6.5m from 5.4m reflecting a recovery in our Energy business. As anticipated at the half year we incurred exceptional costs of around 0.6m and 1.2m in restructuring our Retail business and exiting our investment in Foreshore Ltd respectively. In addition, a 1.8m provision was made for our share of a preventative repair to the interconnector between Guernsey and Jersey which is scheduled to take place in January 2015. The cable, which was repaired in 2012, has been showing similar issues to those experienced two years ago and Guernsey Electricity is also currently seeking permissions to lay a replacement cable as soon as possible. Profit before tax pre-exceptional items, and post the restatement of the 2013 pension costs, rose from 5.9m last year to 10.0m in 2014.
Our Energy business unit sales saw volumes down 6%, falling from 663m to 621m kWh, due to a combination of the temperatures being above the seasonal norm last winter and the corresponding period in the 2013 financial year being particularly cold. Each of the six winter months in this financial year experienced higher temperatures than its corresponding month in 2012/13 and were at, or above, the long-term average level. Despite lower unit sales in our Energy business, profits recovered substantially to 8.0m, a level commensurate with the recognized rate of return required to advance sustainable investment in infrastructure assets. 
Two main factors contributed to this increase in performance - lower generation and the impact of tariff rises. As reported previously, until the new interconnector to France was commissioned, 
which occurred at the end of this financial year, we have been capacity constrained on importation and reliant on a heavier mix of more expensive on-island oil-fired generation, particularly in winter, when volumes are higher. 
In the financial year we generated 15% of our electricity on-island (compared to 21% last year) and imported 80% of our requirements from France (up from 75% in 2013). The remaining 5% of our electricity came from the local Energy from Waste plant against 4% in the same period in 2013. The Energy revenue, and profitability, was also aided by an average 1.5% increase in customer tariffs from 1 April 2014 and the full year impact of the tariff increase in January 2013. In spite of these price rises, our tariffs continue to remain competitive with other jurisdictions.
Profits in our Property division, excluding the impact of investment property revaluation, fell from 1.6m to 1.4m with movements in tenancy arrangements being the main driver. It has been a positive year with 11k square feet of space previously used by our internal Retail business now being let to a UK retailer with a good covenant (SportsDirect.com). In addition, with the sale of our shareholding in Foreshore, we now have the local telecom operator, Sure (Jersey) Ltd, as tenants with a larger footprint than previously let. Our investment property portfolio was revalued upwards by 0.1m to 20.5m this year. Our Retailing business had a challenging year with turnover falling from 12.1m to 11.4m albeit the space utilised has reduced. A profit of 0.2m last year moved to a loss of 0.1m. As reported at the half year an exceptional cost of 0.6m was incurred in restructuring the Retail operation as the business has been facing increasing pressure on margins from UK on-line sales into Jersey. The Building Services business produced a marginal loss, being 0.1m behind last year due to competitive pressures on margin. Our other business units - Jersey Energy, Jendev and Jersey Deep Freeze all had a profitable year. Our shareholding in Foreshore, a data centre joint venture in which we have been involved since 2000, was sold in July and, as reported at the half year, an exceptional cost of 1.2m was associated with this exit.
Interest paid in 2014 was negligible as most of this cost was capitalised up to the date of commissioning of our new interconnector. The taxation charge at 1.5m was higher than in 2013 due to higher profits. Group earnings per share increased 21% to 16.10p (24.26p pre-exceptional costs) compared to restated 13.27p in 2013 due mainly to an increase in profitability.
Dividends paid in the year, net of tax, rose by 5%, from 11.25p in 2013 to 11.80p in 2014. The proposed final dividend for this year is 7.20p, a 6% rise on the previous year. Dividend cover rose from 1.2 times in 2013 to 1.4 times (and to 2.1 times if exceptional costs are excluded) due to a higher level of profits. 
Net cash inflow from operating activities, at 20.1m, was 9.2m higher than in 2013 with increased profitability, and a working capital benefit from a lower level of oil stocks, being the main reasons. Capital expenditure, at 33.06m rose from 26.9m last year with Normandie 3 project spend at 24.0m, being the most material. Proceeds of 1.8m were received from the sale of assets associated with our Foreshore disposal. Net debt, at the year-end was 20.2m being 15.0m higher than last year. 
Our defined benefits pension scheme, which had a 0.8m deficit, net of deferred tax, at the 2013 year end marginally increased to a 1.1m deficit as at 30 September 2014. Although the year-on-year movement was relatively small there were material swings in both assets and liabilities which largely offset each other. Scheme assets rose 11% since the last year end but liabilities increased 12% due to a reduction in the discount rate applied reflecting sentiments in financial markets.
  
Consolidated Income Statement 





for the year ended 30 September 2014








2014

2013


000
000





(restated)
Revenue


98,443

102,338
Cost of sales


(68,468)

(75,922)






Gross profit


29,975

26,416






Revaluation of investment properties


145

155
Operating expenses


(20,079)

(20,663)






Group operating profit before exceptional items


10,041

5,908
Exceptional item - disposal of investment


(1,178)

(600)
 - provision for subsea cable
 repair


(1,800)

-
  - restructuring costs in Retail
business


(570)

-






Group operating profit


6,493

5,308
Interest (payable)/receivable


(26)

53
Finance costs


(11)

(11)






Profit from operations before taxation


6,456

5,350
Taxation


(1,478)

(1,243)






Profit from operations after taxation


4,978

4,107






Attributable to:





Owners of the Company


4,932

4,067
Non-controlling interests


46

40



 4,978

 4,107
Earnings per share





- basic and diluted


16.10p

13.27p 






Consolidated Statement of Comprehensive Income 


for the year ended 30 September 2014







2014

2013

000
000





(restated)

Profit for the year

4,978

4,107

Items that will not be reclassified subsequently to profit or loss





Actuarial (loss)/gain on defined benefit scheme 

(392)

5,498

Reclassification of investment properties

-

4,822

Income tax relating to items not reclassified

78

(1,249)



(314)

9,071

Items that will be reclassified subsequently to profit or loss





Fair value (loss)/gain on cash flow hedges 

(4,567)

3,809 

Income tax relating to items that may be reclassified

913

(842) 



(3,654)

2,967

Total comprehensive income for the year

1,010

16,145

Attributable to:





Owners of the Company

964

16,105

Non-controlling interests

46

40


1,010

16,145
Balance Sheets at 30 September 2014


Group
Company




2014 

2013

2014 
2013 




 000

 000

 000
 000

NON-CURRENT ASSETS




(restated)


(restated)


Intangible assets


20 

26 

20 
26 

Property, plant and equipment


184,846

155,191 

184,841 
155,177 

Investment properties


20,505

20,360

20,505 
20,360 

Other investments


5 

5 

482 
482 











Total non-current assets

205,376

175,582

205,848
176,045


CURRENT ASSETS









Inventories


7,334

9,434

7,268
9,365

Trade and other receivables


 16,750

 16,498 

16,576
16,360

Derivative financial instruments


-

1,273

-
1,273

Cash and cash equivalents


 9,776 

 4,798 

9,659
4,621

Total current assets

 33,860

32,003
 
 33,503 
31,619


Total assets


 239,236 

 207,585 

239,351
207,664

LIABILITIES









Trade and other payables


 24,113 

 14,332 

 24,049 
 14,272 











Derivative financial instruments


4,246

952

4,246
952











Total current liabilities

 
28,359

15,284

28,295
15,224











NET CURRENT ASSETS


5,501

16,719

5,208
16,395

NON-CURRENT LIABILITIES









Trade and other payables


 18,279 

 17,851 

 18,279 
 17,851 

Retirement benefit deficit


1,372

1,018

1,372
1,018

Financial liabilities - preference shares


235 

235 

235 
235 











Borrowings


30,000

10,000

30,000
10,000

Deferred tax liabilities


 14,852

 14,365

 14,852
 14,365

Total non-current liabilities

64,738

 43,469

64,738
43,469


Total liabilities

 93,097 

 58,753

93,033
58,693


Net assets


 146,139

 148,832 

 146,318
 148,971

EQUITY









Share capital


 1,532 

 1,532 

 1,532 
 1,532 

Revaluation reserve


5,270

5,270

5,270
5,270

ESOP reserves


(36)

(58)

(36)
(58)

Other reserves


(3,515)

139

(3,515)
139

Retained earnings


 142,878

 141,925

 143,067 
 142,088 

Equity attributable to owners of the company


 146,129

 148,808 

 146,318 
 148,971 

Non-controlling interests


 10 

 24 

 - 
 - 

Total equity


 146,139 

 148,832 

 146,318 
 148,971 
Cash Flow Statements
for the year ended 30 September 2014


Group
Company


2014 
2013 
2014 
2013 








 000
 000
 000
 000
Cash flows from operating activities


(restated)

(restated)






Operating profit 

10,041 
5,908 
9,989 
5,901 
Depreciation and amortisation charges

8,259 
8,166 
8,256 
8,163 
Gain on revaluation of investment properties

(145)
(155)
(145)
(155)
Pension contributions paid less expense in Income Statement

(38)
448
(38)
448
Adjustment for foreign exchange hedges

63
(513)
63
(513)
Loss on sale of fixed assets

(11) 
(21) 
(11) 
(21) 
Operating cash flows before movement in working capital

18,169
13,833
18,114
13,823






Decrease/(increase) in inventories

2,100
(2,189)
2,097
(2,199)
(Increase)/decrease in trade and other receivables

(252)
1,472
(216)
1,377
Increase/(decrease) in trade and other payables

513 
(1,545) 
507 
(1,559) 
Interest (paid)/received

(28) 
97 
(28) 
97 
Preference dividends paid

(9)
(9)
(9)
(9)
Cash amounts relating to exceptional item

(353)
-
(353)
-
Income taxes paid

-
(762)
-
(762)






Net cash flows generated from operating activities

20,140 
10,897 
20,112 
10,768 






Cash flows from investing activities





Purchase of property, plant and equipment

(33,048)
(26,910)
(33,048)
(26,898)
Investment in intangible assets

(6)
(8)
(6)
(8)
Net proceeds from disposal of investment

1,579
-
1,579
-
Net proceeds from disposal of fixed assets

16
14
16
14
Short-term investments

-
9,020
-
9,020






Net cash flows used in investing activities

(31,459)
(17,884)
(31,459)
(17,872)






Cash flows from financing activities





Equity dividends paid

(3,703)
(3,526)
(3,615)
(3,446)
Repayment of borrowings

(10,000)
-
(10,000)
-
Proceeds from borrowings

30,000
10,000
30,000
10,000






Net cash flows generated from financing activities

16,297
6,474
16,385
6,554






Net increase/(decrease) in cash and cash equivalents

4,978 
(513) 
5,038 
(550) 
Cash and cash equivalents at beginning of period 

4,798 
5,311 
4,621 
5,171 
Net cash and cash equivalents at end of period

9,776 
4,798 
9,659 
4,621 

Consolidated Statement of Changes in Equity

for the year ended 30 September 2014



Share capital
Revaluation reserve
ESOP reserve
Other reserves
Retained earnings
Total 







Group:
 000
 000
 000
 000
 000
 000







At 1 October 2013
1,532
5,270
(58)
139
141,925
148,808
Profit from operations after taxation
-
-
-
-
4,932
4,932
Amortisation of employee share scheme
-
-
22
-
(22)
-
Unrealised loss on hedges (net of tax)
-
-
-
(3,654)
-
(3,654)
Actuarial loss on defined benefit scheme (net of tax)
-
-
-
-
(314)
(314)
Equity dividends
-
-
-
-
(3,643)
(3,643)
At 30 September 2014
1,532
5,270
(36)
(3,515)
142,878
146,129











(restated)
(restated)
At 1 October 2012
1,532
-
(100)
(2,381)
137,097
136,148
Reclassification of reserves
-
448
-
(448)
-
-
Profit from operations after taxation
-
-
-
-
5,022
5,022
Retrospective application of IAS 19R




(955)
(955)
Amortisation of employee share scheme
-
-
42
-
(42)
-
Unrealised gain on hedges (net of tax)
-
-
-
2,968
-
2,968
Actuarial gain on defined benefit scheme (net of tax)
-
-
-
-
4,249
4,249
Reclassification of investment properties
-
4,822
-
-
-
4,822
Equity dividends
-
-
-
-
(3,446)
(3,446)
At 30 September 2013
1,532
5,270
(58)
139
141,925
148,808







Share capital
Revaluation reserve
ESOP reserve
Other reserves
Retained earnings
Total 
Company:













At 1 October 2013
1,532
5,270
(58)
139
142,088
148,971
Profit from operations after taxation
-
-
-
-
4,930
4,930
Amortisation of employee share scheme
-
-
22
-
(22)
-
Unrealised gain on hedges (net of tax)
-
-
-
(3,654)
-
(3,654)
Actuarial gain on defined benefit scheme (net of tax)
-
-
-
-
(314)
(314)
Equity dividends
-
-
-
-
(3,615)
(3,615)
At 30 September 2014
1,532
5,270
(36)
(3,515)
143,067
146,318











(restated)
(restated)
At 1 October 2012
1,532
-
(100)
(2,381)
137,227
136,278
Reclassification of reserves
-
448
-
(448)
-
-
Profit from operations after taxation
-
-
-
-
5,055
5,055
Retrospective application of IAS 19R




(955)
(955)
Amortisation of employee share scheme
-
-
42
-
(42)
-
Unrealised gain on hedges (net of tax)
-
-
-
2,968
-
2,968
Actuarial gain on defined benefit scheme (net of tax)
-

-
-
4,249
4,249
Reclassification of investment properties
-
4,822
-
-
-
4,822
Equity dividends
-
-
-
-
(3,446)
(3,446)
At 30 September 2013
1,532
5,270
(58)
139
142,088
148,971
Notes to the accounts
Year ended 30 September 2014
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc, for the year ended 30 September 2014 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). 
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 Group expects to publish full financial statements that comply with IFRS in early 2015. 
The Group has considerable financial resources and as a consequence, the directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The directors have a reasonable expectation that the Group 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:








2014
2014
2014

2013
2013
2013

External
Internal
Total

External
Internal
Total

000
000
000

000
000
000
Revenue







Energy
 79,459 
 141 
 79,600 

 81,962 
 166 
 82,128 
Building Services
 3,294 
 907 
 4,201

 3,606 
 476 
 4,082
Retail 
 11,414 
 33 
 11,447 

 12,145 
 39 
 12,184 
Property
 1,957 
 616 
 2,573 

 2,191 
 687 
 2,878 
Other 
 2,319 
 878 
 3,197 

 2,434 
 751 
 3,185 

 98,443 
 2,575 
 101,018

 102,338 
 2,119 
 104,457
Intergroup elimination


(2,575)



(2,119)
Revenue


 98,443 



 102,338 








Operating profit







Energy


 7,952 



 3,229 
Building Services


 (44) 



 104 
Retail 


 (86) 



 188
Property


 1,415 



 1,609 
Other


659



623
Operating profit before property revaluation


9,896 



5,753 
Revaluation of investment properties


145 



155 








Exceptional items - disposal of investment


(1,178)



(600)
 - provision for subsea cable repair


(1,800)



-
 - restructuring costs in Retail business


(570)



-








Group operating profit


6,493



5,308

This information is provided by RNS
The company news service from the London Stock Exchange
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