Preliminary Annual Results

RNS Number : 0890U

Jersey Electricity PLC

21 December 2012

 

 

    Jersey Electricity plc                            

 Preliminary Announcement of Annual Results

Year Ended 30 September 2012

At a meeting of the Board of Directors held on 20 December 2012, the final accounts for the Group for the year to 30 September 2012 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 2012 or 2011, but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Jersey Registrar of Companies and those for 2012 will be delivered in early 2013. The auditor has reported on those accounts and their reports were unmodified. 

A final dividend of 6.50p on the Ordinary and 'A' Ordinary shares in respect of the year ended 30 September 2012 was recommended to be maintained at the same level as in 2011. Together with the interim dividend of 4.50p the proposed total dividend declared for the year was 11.00p on each share.

The final dividend will be paid on 4 April 2013 to those shareholders registered in the books of the Company on 22 February 2013. A dividend on the 5% cumulative participating preference shares of 1.5% (2011:1.5%) payable on 1 July 2013 was also recommended.

The Annual General Meeting of the Company will be held on 4 March 2013.

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 : [e-mail]                                                       Email : [e-mail]

20 December 2012     

The Powerhouse

PO Box 45

Queens Road

St Helier

Jersey JE4 8NY

JERSEY ELECTRICITY plc                       

Preliminary Announcement of Annual Results

Year ended 30 September 2012                                                                                                       

The Chairman, Geoffrey Grime, comments :

"At the beginning of the year, we would never have predicted the extraordinary events facing the business during 2011/12. On 29 April we experienced our first ever submarine cable fault on the Channel Islands Electricity Grid (CIEG), resulting in the temporary loss of the Jersey-Guernsey link. Less than two months later, on 17 June, both interconnectors to France failed within an hour of each other, resulting in only the second Island-wide power failure in six years.  Then on 25 September, Jersey Electricity faced its most difficult restoration ever following the failure of the sole remaining submarine cable connecting Jersey to France and a third instance of loss of power to the Island. The pressure on staff during this period has been huge and their response exceptional but as you would expect our financial performance has naturally been impacted by the consequences of such events."

Financial Summary	2012	2011	% change
Turnover	£97.2m	£100.5m	(3)%
Profit before tax	£  5.7m	£  11.1m	(48)%
Profit in Energy business	£  4.2m	£    7.7m	(45)%
Earnings per share	12.55p	28.05p	(55)%
Dividends paid per ordinary share	11.00p	13.70p	(20)%

Group turnover for the year to 30 September 2012 at £97.2m was 3% lower than in the year ended 30 September 2011. Unit sales volumes were 2% lower than last year and consequently revenues in our Energy business fell to £72.7m. Turnover in our Retail business decreased by 6%, from £16.5m to £15.5m, with around half this shortfall being in our e-retailing internet business, daytodayshop.com which we closed in August 2012.  Turnover in the Property business, including internal revenues, fell by £0.1m to £2.8m due to loss of a commercial tenant. Turnover in Building Services fell 11% from levels experienced in 2011 to £4.2m. Turnover in our Other Businesses rose from £2.6m to £2.7m with increased revenues in both Jendev and Jersey Energy.    

Profit before tax for the year to 30 September 2012 fell to £5.7m from £11.1m. Our Energy business accounted for most of this reduction with mild weather, and issues directly and indirectly associated with interconnector failures during the year, being the primary drivers. In addition, the non-cash, £1.1m impairment of our investment in Foreshore Ltd was the other material reason for reduced year-on-year group profit.

Profits in our Energy business fell £3.5m from £7.7m to £4.2m. Unit sales of electricity were 2% behind those in 2011, due to a particularly mild winter period, and contributed to a £1.9m reduction in gross margin. In addition, the uninsured element of £0.9m from the £9m repair of the Guernsey-Jersey subsea cable and the decommissioning of our irreparable 28 year old cable to France, at £0.7m, including accelerated depreciation, were unexpected costs.

Tariffs to our customers were increased by 2.9% in May 2012 and the average customer will unfortunately see a rise of around 9% from 1 January 2013 as we will be generating more heavily during the coming year due to the aforementioned issues associated with the loss of the interconnector to France. The forthcoming tariff rise is primarily a result of the differential price between generating using oil against importing from France. These additional costs are forecast to remain until the planned replacement interconnector to France is delivered in 2015.

We have materially hedged our imported power and foreign exchange requirements for 2013 and 2014 and 75% of our expected oil requirements for the 2012/13 financial year. We again imported most of our power requirements from France (92% against 96% in the previous year) but this will fall in the next financial year to an expected level of around 80%.

Profits in our Property division, excluding the impact of investment property revaluation, were at a similar level to 2011 at £1.6m. Our investment property portfolio was revalued downwards 2% by £0.3m to £14.9m this year due mainly to a change in yield assumptions.

Our Retailing business had a challenging year with turnover falling from £16.5m to £15.5m. Profitability was impacted by reduced margins and the closure of our internet retailer, daytodayshop.com, due to the ending of the Low Value Consignment Relief (LVCR) tax concession by the UK Government.

The Building Services business produced a £0.3m profit, being £0.1m ahead of last year despite pressure on margins in a very competitive marketplace.

Our other business units - Jersey Energy, Jendev and Jersey Deep Freeze all had a profitable year. Foreshore, our data centre joint venture, had a turnover of £4.9m being at the same level as 2011 with profitability remaining around the breakeven level. However an impairment review of our investment resulted in the writing off of £1.1m. Future forecast returns have been impacted by changing circumstances, including the impending loss of its largest customer, who was also impacted by the abolition of the LVCR tax concession that previously existed between Jersey and the UK.   

Interest received on deposits in 2012 at £0.3m was at the same level as in the previous year with a lower cash level offset by marginally better achieved returns. The taxation charge at £1.8m was lower than in 2011 because of reduced profits. Group earnings per share fell 55% to 12.55p compared to 28.05p in 2011 primarily due to lower profits.

Dividends paid in the year, net of tax, fell by 19.7%, from 13.70p in 2011 to 11.00p in 2012. However the underlying increase was 5.3% as a special dividend of 3.25p per share was paid last year. The proposed final dividend for 2012 is maintained at 6.50p, resulting in a total proposed dividend for the year of 11.00p, being an underlying rise of 2.3% on the previous year. Dividend cover fell from 2.1 times in 2011 to 1.1 times due primarily to the lower level of profit. The aim going forward is to maintain our previously published declared ambition for sustained real growth in dividends over the medium-term.   

Net cash inflow from operating activities at £11.9m was £8.9m lower than 2011 with lower profits and a large insurance debtor for the Guernsey to Jersey cable repair being the main reasons. Capital expenditure, at £18.8m rose from £15.0m last year with the £8.5m spend on diesel engines, which are due to be commissioned before the end of 2012 being the most material project spend. Cash and cash equivalents, including short-term investments, at the year-end were £14.3m being £10.3m lower than last year.

Our defined benefits pension scheme, which had a £3.5m deficit, net of deferred tax, at the 2011 year end showed a £4.9m deficit as at 30 September 2012. This movement was due mainly to the increase in liabilities, associated with lower discount rates in financial markets.

Consolidated Income Statement
for the year ended 30 September 2012
				2012				2011
				£000				£000
Revenue				97,182				100,494
Cost of sales				(69,346)				(69,989)
Gross profit				27,836				30,505
Revaluation of investment properties				(325)				(115)
Operating expenses				(20,900)				(19,553)
Group operating profit before joint venture				6,611				10,837
Share of loss of joint venture				(15)				(86)
Exceptional item - impairment of investment				(1,137)				-
Group operating profit				5,459				10,751
Interest receivable				287				327
Finance costs				(11)				(11)
Profit from operations before taxation				5,735				11,067
Taxation				(1,796)				(2,423)
Profit from operations after taxation				3,939				8,644
Attributable to:
Owners of the Company				3,846				8,593
Non-controlling interests				93				51
				3,939				8,644
Earnings per share
- basic and diluted				12.55p				28.05p
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2012
				2012				2011
				£000				£000
Profit for the  year				3,939				8,644
Other comprehensive income
Actuarial loss on defined benefit scheme				(2,278)				(6,640)
Fair value (loss)/gain on cash flow hedges				(4,021)				100
Tax related components relating to other comprehensive income				1,227				1,308
Total comprehensive income  for the year				(1,133)				3,412
Attributable to:
Owners of the Company				(1,226)				3,361
Non-controlling interests				93				51
				(1,133)				3,412

	Balance Sheets at 30 September 2012			Group				Company
				2012		2011		2012	2011
				£ 000		£ 000		£ 000	£ 000
	NON-CURRENT ASSETS
	Intangible assets			51		60		51	60
	Property, plant and equipment			138,125		128,330		138,120	128,327
	Investment properties			14,865		14,813		14,865	14,813
	Other investments			5		1,557		482	2,291
	Long-term loans			400		-		400	400
	Total non-current assets			153,446		144,760		153,918	145,891	145,891
	CURRENT ASSETS
	Inventories			7,245		6,451		7,166	6,384
	Trade and other receivables			17,970		15,361		17,737	15,162
	Derivative financial instruments			-		486		-	486
	Short-term investments - cash deposits			9,020		17,745		9,020	17,745
	Cash and cash equivalents			5,311		6,787		5,171	6,701
	Total current assets			39,546		46,830		39,094	46,478	46,478
	Total assets			192,992		191,590		193,012	192,369
	LIABILITIES
	Trade and other payables			17,037		15,878		16,992	15,811
	Derivative financial instruments			4,002		-		4,002	-
	Current tax payable			762		1,820		762	1,820
	Total current liabilities			21,801		17,698		21,756	17,631
	NET CURRENT ASSETS			17,745		29,132		17,338	28,847
	NON-CURRENT LIABILITIES
	Trade and other payables			17,644		17,152		17,642	17,152
	Retirement benefit deficit			6,068		4,420		6,068	4,420
	Financial liabilities - preference shares			235		235		235	235
	Deferred tax liabilities			11,033		11,226		11,033	11,226
	Total non-current liabilities			34,980		33,033		34,978	33,033	33,033
	Total liabilities			56,781		50,731		56,734	50,664	50,664
	Net assets			136,211		140,859		136,278	141,705
	EQUITY
	Share capital			1,532		1,532		1,532	1,532
	ESOP reserves			(100)		-		(100)	-
	Other reserves			(1,527)		836		(1,527)	836
	Retained earnings			136,243		138,477		136,373	139,337
	Equity attributable to owners of the company			136,148		140,845		136,278	141,705
	Non-controlling interests			63		14		-	-
	Total equity			136,211		140,859		136,278	141,705

Cash Flow Statements
for the year ended 30 September 2012
		Group		Company
		2012	2011	2012	2011
		£ 000	£ 000	£ 000	£ 000
Cash flows from operating  activities
Operating profit		6,611	10,837	6,444	10,799
Adjustment for disposal of shares in associate		-	(59)	-	(59)
Adjustment for repayment of long-term loan by associate		-	(136)	-	(136)
Depreciation and amortisation charges		8,293	8,212	8,293	8,212
Loss on revaluation of investment properties		325	115	325	115
Pension contributions paid less expense in Income Statement		(630)	(438)	(630)	(438)
Adjustment for foreign exchange hedges		465	-	465	-
(Loss)/profit on sale of fixed assets		(16)	6	(16)	6
Operating cash flows before movement in working capital		15,048	18,537	14,881	18,499
(Increase)/decrease in inventories		(794)	1,122	(782)	1,123
(Increase)/decrease in trade and other receivables		(2,772)	617	(2,736)	632
Increase in trade and other payables		1,904	2,326	1,924	2,334
Interest received		347	309	347	309
Preference dividends paid		(9)	(9)	(9)	(9)
Income taxes paid		(1,820)	(2,067)	(1,820)	(2,067)
Net cash flows generated from operating activities		11,904	20,835	11,805	20,821
Cash flows from investing activities
Purchase of property, plant and equipment		(18,823)	(14,940)	(18,823)	(14,940)
Investment in intangible assets		9	(31)	9	(31)
Net proceeds from disposal of  fixed assets		53	17	53	17
Repayment of long-term loans by joint venture and associate		-	186	-	186
Disposal of shares in associate		-	59	-	59
Short-term investments		8,725	175	8,725	175
Net cash flows used in investing activities		(10,036)	(14,534)	(10,036)	(14,534)
Cash flows from financing  activities
Equity dividends paid		(3,414)	(4,270)	(3,370)	(4,198)
Net cash flows used in financing activities		(3,414)	(4,270)	(3,370)	(4,198)
Net (decrease)/increase in cash and cash equivalents		(1,546)	2,031	(1,601)	2,089
Cash and cash equivalents at 1 October		6,787	4,756	6,701	4,612
Net cash and cash equivalents		5,241	6,787	5,101	6,701
Overdraft		70	-	70	-
Net cash and cash equivalents at 30 September		5,311	6,787	5,171	6,701

	Consolidated  Statement of Changes in Equity
	for the year ended 30 September 2012
		Share capital	ESOP reserve	Other reserves	Retained earnings	Total reserves
Group:		£ 000	£ 000	£ 000	£ 000	£ 000
At 1 October 2011		1,532	-	836	138,477	140,845
Total recognised income and expense for the year		-	(100)	-	3,846	3,746
Unrealised losses on hedges (net of tax)		-	-	(3,217)	-	(3,217)
Actuarial loss on defined benefit scheme (net of tax)		-	-	-	(1,856)	(1,856)
Equity dividends		-	-	-	(3,370)	(3,370)
At 30 September 2012		1,532	(100)	(2,381)	137,097	136,148
At 1 October 2010		1,532	-	756	139,396	141,684
Total recognised income and expense for the year		-	-	-	8,593	8,593
Unrealised gain on hedges (net of tax)		-	-	80	-	80
Actuarial loss on defined benefit scheme (net of tax)		-	-	-	(5,314)	(5,314)
Equity dividends		-	-	-	(4,198)	(4,198)
At 30 September 2011		1,532	-	836	138,477	140,845
		Share capital	ESOP reserve	Other reserves	Retained earnings	Total reserves
Company:
At 1 October 2011		1,532	-	836	139,337	141,705
Total recognised income and expense for the year		-	(100)	-	3,116	3,016
Unrealised losses on hedges (net of tax)		-	-	(3,217)	-	(3,217)
Actuarial loss on defined benefit scheme (net of tax)		-	-	-	(1,856)	(1,856)
Equity dividends		-	-	-	(3,370)	(3,370)
At 30 September 2012		1,532	(100)	(2,381)	139,227	136,278
At 1 October 2010		1,532	-	756	140,982	143,270
Total recognised income and expense for the year		-	-	-	7,867	7,867
Unrealised gain on hedges (net of tax)		-	-	80	-	80
Actuarial loss on defined benefit scheme (net of tax)		-	-	-	(5,314)	(5,314)
Equity dividends		-	-	-	(4,198)	(4,198)
At 30 September 2011		1,532	-	836	139,337	141,705

Notes to the accounts

Year ended 30 September 2012

1.   Basis of Preparation

The consolidated financial statements of Jersey Electricity plc, for the year ended 30 September 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), including International Accounting Standards (IAS) and Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). 

While the financial information included in this preliminary announcement has been pr

epared 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 2012.

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:
	2012	2012	2012		2011	2011	2011
	External	Internal	Total		External	Internal	Total
	£000	£000	£000		£000	£000	£000
Revenue			)9				)9
Energy	72,671	197	72,868		74,486	326	74,812
Building Services	4,195	325	4,520		4,716	232	4,948
Retail	15,472	64	15,536		16,499	67	16,566
Property	2,141	690	2,831		2,216	688	2,904
Other	2,703	601	3,304		2,577	654	3,231
	97,182	1,877	99,059		100,494	1,967	102,461
Inter-Segment elimination			(1,877)				(1,967)
Revenue			97,182				100,494
Operating profit
Energy			4,240				7,678
Building Services			300				220
Retail			64				476
Property			1,609				1,652
Other			708				840
Operating profit before property revaluation			6,921				10,866
Loss on revaluation of investment properties			(325)				(115)
Exceptional item - impairment of investment			(1,137)				-
Group operating profit			5,459				10,751

 

END

 

 

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