TIDMJEL
RNS Number : 4375K
Jersey Electricity PLC
14 December 2018
JERSEY ELECTRICITY plc Preliminary Announcement of Annual
Results
Year Ended 30 September 2018
At a meeting of the Board of Directors held on 13 December 2018,
the final accounts for the Group for the year to 30 September 2018
were approved, details of which follow.
The financial information set out in the announcement does not
constitute the Group's statutory accounts for the year ended 30
September 2018 or 2017, but is derived from those accounts.
Statutory accounts for 2017, have been delivered to the Jersey
Registrar of Companies, and those for 2018 will be delivered in
early 2019. The auditor has reported on the accounts for both years
and their reports were unmodified.
A final dividend of 8.8p on the Ordinary and 'A' Ordinary shares
in respect of the year ended 30 September 2018 was recommended
(2017: 8.4p). Together with the interim dividend of 6.1p (2017:
5.8p) the proposed total dividend declared for the year was 14.9p
on each share (2017: 14.2p).
The final dividend will be paid on 28 March 2019 to those
shareholders registered in the books of the Company on 22 February
2019. A dividend on the 5% cumulative participating preference
shares of 1.5% (2017: 1.5%) payable on 1 July 2019 was also
recommended.
The Annual General Meeting of the Company will be held on 28
February 2019. On that date Geoffrey Grime will retire as Chairman
and Director of the Company, and Phil Austin, currently a Board
member, will assume the role of Chairman.
M.P. Magee P.J. Routier
Finance Director Company Secretary
Direct telephone number : 01534 505201 Direct telephone number
:01534 505253
Email : mmagee@jec.co.uk Email : proutier@jec.co.uk
13 December 2018
The Powerhouse
PO Box 45
Queens Road
St Helier
Jersey JE4 8NY
JERSEY ELECTRICITY plc
Preliminary Announcement of Annual Results
Year ended 30 September 2018
The Chairman, Geoffrey Grime, comments:
"The Group recorded its best ever financial performance for the
third year in succession. Group revenue for the year 2017/18 was
GBP105.9m, 4% higher than 2017 and profit before tax increased to
GBP15.3m up from the GBP13.5m achieved last year. This was
supported by strong underlying performance in the Energy business,
which saw a new record peak demand of 178MW set and a 2% increase
in unit sales volumes from 621m to 634m units. Our Powerhouse
retail business also witnessed continued strong growth in a
challenging sector, with profits up 11% to GBP0.8m on an increased
turnover of GBP13.6m, up 5% on last year.
We have made excellent progress on all our major investment
projects during the year. St Helier West Primary Substation is
about to be commissioned. Our smart metering programme,
SmartSwitch, is entering its final phase, with 87% of our customers
now converted and benefits already being realised. We successfully
launched an innovative "smart home" demonstration store, Smarter
Living, embedded in the Powerhouse retail store which is receiving
great interest from customers. In France, we completed an important
GBP1m upgrade on our Normandie 2 circuit to increase both import
capacity and security of supply.
As the Island's leading energy supplier, we bear an enormous
responsibility to our customers and we continue our programme of
activities to seek feedback from them. We are aware that there is
more to do to promote energy efficiency, local renewables and
electric transportation, but it is reassuring we continue to
receive positive feedback from stakeholders. Once again, I am
pleased to report that our ratings in both our supply service and
overall customer service showed improvements on last year.
Maintaining profitability is essential to continued investment
in infrastructure and to providing a sustainable electricity
service for everyone including all of our stakeholders. I am also
pleased to report a proposed final dividend for this year of 8.8p,
a 5% rise on the previous year, payable on 28 March 2019.
I will be formally stepping down as Chairman at the AGM on 28
February 2019 but I am delighted to be handing over to Phil Austin
a Company that is well positioned for the future and I wish Phil
and the whole Board the very best in continuing to steer Jersey
Electricity through the many exciting opportunities ahead."
Financial Highlights 2018 2017
Revenue GBP105.9m GBP102.1m
Profit before tax GBP15.3m GBP13.5m
Earnings per share 39.5p 34.6p
Dividend paid per share 14.5p 13.8p
Final proposed dividend per share 8.8p 8.4p
Net debt GBP14.3m GBP21.9m
----------------------------------- ----------- ----------
Group revenue for the year to 30 September 2018 at GBP105.9m was
4% higher than in the previous financial year. Energy revenues at
GBP82.3m were 2% higher than the GBP80.4m achieved in 2017 with a
2% increase in the unit sales volumes of electricity, largely
driven by weather, being the main factor. Turnover in the
Powerhouse retail business increased by 5% from GBP12.9m to
GBP13.6m. Revenue in the Property business rose GBP0.1m to GBP2.3m
due to higher rental income. Revenue from JEBS, our contracting and
building services business, rose GBP0.8m from levels experienced in
2017 to GBP4.8m. Turnover in our other businesses rose GBP0.2m to
GBP2.9m.
Cost of sales at GBP65.1m was GBP2.1m higher than last year with
an increase in import costs in our Energy business and higher sales
activity in the Powerhouse retail business being the main
reasons.
Operating expenses, at GBP24.4m were at the same level as in
2017.
Profit before tax for the year to 30 September 2018, at
GBP15.3m, increased by 14% from GBP13.5m in 2017. Our Energy
business unit sales saw volumes increasing from 621m to 634m
kilowatt hours with strong winter period sales and the benefits of
switching customers from other heating fuels more than offsetting
the continued impact of energy efficiency measures employed by our
customers.
Profits in our Energy business moved up to GBP13.4m from
GBP11.7m last year. The higher level of sales resulted in an
improved gross margin and this was supplemented by ongoing
initiatives to reduce both manpower and maintenance costs. Customer
tariffs rose by 2% in June 2018 yet remained competitive with other
jurisdictions but this accounted for only GBP0.4m of the increase
in profits with the remainder driven by cost efficiencies and
increased unit sales of electricity. The UK saw material increases
in retail electricity prices for their customers during both 2017
and 2018 with an average rise of 24% across the 'Big 6'
suppliers.
In the financial year we imported 95% of our requirements from
France (2017: 93%) and generated only 0.2% of our electricity
on-island at La Collette Power Station (2017: 1%). The remaining 5%
(2017: 6%) of our electricity came from the local Energy from Waste
plant being marginally below that seen in 2017.
Profits in our Property division, excluding the impact of
investment property revaluation, at GBP1.8m, were GBP0.2m above the
level last year due to a higher rental level and reduced costs. Our
investment property portfolio was revalued upwards this year by
GBP0.3m to GBP20.5m by the external consultants who review the
position annually due primarily to the growth in the value of the
residential properties that we rent to tenants.
Our Powerhouse retailing business saw continued strong growth in
sales with profits moving up 11% to GBP0.8m in 2018.
JEBS, our contracting and business services unit had a
challenging year and incurred a loss of GBP0.2m against a profit of
GBP0.1m in 2017 as the business was impacted by both a decline in
margins and some exceptional costs. Plans are being implemented to
improve performance in this business unit.
Our other business units (Jersey Energy, Jendev, Jersey Deep
Freeze and fibre optic lease rentals) produced profits of GBP0.6m
being 12% higher than last year.
Net Interest in 2018 was GBP1.3m being GBP0.1m higher than last
year because in 2017 there was still an element of capitalisation
of interest associated with the new N1 subsea cable. The taxation
charge at GBP3.2m was GBP0.3m higher than 2017 due to the increase
in profit.
Group earnings per share rose to 39.5p compared to 34.6p in 2017
due mainly to increased profitability.
Dividends paid in the year, net of tax, rose by 5%, from 13.8p
in 2017 to 14.5p in 2018. The proposed final dividend for this year
is 8.8p, a 5% rise on the previous year. Dividend cover was 2.7
times compared to 2.5 times in 2017.
Net cash inflow from operating activities at GBP27.0m was
GBP0.5m higher than in 2017 with higher operating profit being the
primary driver. Capital expenditure, at GBP14.9m was marginally
lower than GBP15.1m last year with spend on the St Helier West
primary sub-station being the most material project in 2018. In the
2017 financial year the most material primary spend was on the N1
subsea cable project prior to commissioning in December 2016. The
resultant position was that net debt at the year-end was GBP14.3m,
being GBP30.0m of borrowings less GBP15.7m of cash and cash
equivalents, which was GBP7.6m lower than last year.
Our defined benefits pension scheme, showed a surplus at 30
September 2018, under IAS 19 "Employee Benefits", of GBP3.8m, net
of deferred tax, compared with a deficit of GBP3.4m at 30 September
2017. Scheme liabilities decreased 2% to GBP131.4m since the last
year end with the discount rate assumption, which heavily
influences the calculation of liabilities, rising from 2.7% in 2017
to 2.9% in 2018 to reflect sentiments in prevailing financial
markets. In addition, scheme assets rose 5% to GBP136.2m in the
same period.
Consolidated Income Statement 2018 2017
For the year ended 30 September 2018 GBP000 GBP000
Revenue 105,874 102,085
Cost of sales (65,110) (63,023)
------------------------- -------------------------
Gross Profit 40,764 39,062
Revaluation of investment properties 310 40
Operating expenses (24,380) (24,379)
------------------------- -------------------------
Group operating profit 16,694 14,723
Finance income 28 3
Finance costs (1,377) (1,268)
Profit from operations before taxation 15,345 13,458
Taxation (3,152) (2,834)
------------------------- -------------------------
Profit from operations after taxation 12,193 10,624
========================= =========================
Attributable to:
Owners of the Company 12,115 10,599
Non-controlling interests 78 25
------------------------- -------------------------
12,193 10,624
========================= =========================
Earnings per share
- basic and diluted 39.54p 34.59p
Consolidated Statement of Comprehensive 2018 2017
Income
GBP 000 GBP 000
Profit for the year 12,193 10,624
Items that will not be reclassified subsequently
to profit or loss:
Actuarial gain on defined benefit scheme 10,166 8,859
Income tax relating to items not reclassified (2,033) (1,772)
-------- --------
8,133 7,087
Items that may be reclassified subsequently
to profit or loss:
Fair value loss on cash flow hedges (4,261) (1,673)
Income tax relating to items that may be
reclassified 852 335
-------- --------
(3,409) (1,338)
Total comprehensive income for the year 16,917 16,373
Attributable to:
Owners of the Company 16,839 16,348
Non-controlling interests 78 25
-------- --------
16,917 16,373
A presentational change to the 2017 figures has arisen as a
result of elements previously embedded within cost of sales and
finance costs being reclassified and shown in revenue. There has
been no impact on profit.
Consolidated Balance Sheet
30 September 2018
2018 2017
GBP 000 GBP 000
NON-CURRENT ASSETS
Intangible assets 938 1,110
Property, plant and equipment 215,153 211,921
Investment properties 20,460 20,150
Trade and other receivables 501 592
Retirement benefit surplus 4,751 -
Derivative financial instruments 682 2,790
Other investments 5 5
--------------- ------------------
Total non-current assets 242,490 236,568
------------------------------------- --------------- ------------------
CURRENT ASSETS
------------------------------------ --------------- ------------------
Inventories 7,092 6,825
Trade and other receivables 15,202 15,782
Derivative financial instruments 2,338 4,454
Cash and cash equivalents 15,735 8,076
Total current assets 40,367 35,137
--------------- ------------------
Total assets 282,857 271,705
---------------------------------------- --------------- ------------------
LIABILITIES
------------------------------------ --------------- ------------------
Trade and other payables 15,284 15,885
Current tax liabilities 2,299 1,034
Derivative financial instruments 120 -
Total current liabilities 17,703 16,919
--------------- ------------------
NET CURRENT ASSETS 22,664 18,218
----------------------------------------
NON-CURRENT LIABILITIES
-------------------------------------- --------------- ------------------
Trade and other payables 20,348 20,177
Retirement benefit deficit - 4,219
Derivative financial instruments 89 172
Financial liabilities - preference
shares 235 235
Borrowings 30,000 30,000
Deferred tax liabilities 25,753 23,719
Total non-current liabilities 76,425 78,522
--------------- ------------------
Total liabilities 94,128 95,441
--------------- ------------------
Net assets 188,729 176,264
---------------------------------------- --------------- ------------------
EQUITY
------------------------------------ --------------- ------------------
Share capital 1,532 1,532
Revaluation reserve 5,270 5,270
ESOP reserve (41) (84)
Other reserves 2,249 5,658
Retained earnings 179,666 163,862
Equity attributable to owners of
the company 188,676 176,238
Non-controlling interests 53 26
--------------- ------------------
Total equity 188,729 176,264
---------------------------------------- --------------- ------------------
Consolidated
Statement of
Changes
in Equity for the
year ended Share Revaluation ESOP Other Retained
30 September 2018 capital reserve reserve reserves earnings Total
GBP GBP GBP GBP
000 GBP 000 000 000 GBP 000 000
At 1 October 2017 1,532 5,270 (84) 5,658 163,862 176,238
Total recognised
income and
expense for the
year - - - - 12,115 12,115
Funding of
employee share
option
scheme - - (9) - - (9)
Amortisation of
employee share
option scheme - - 52 - - 52
Unrealised loss
on hedges (net
of tax) - - - (3,409) - (3,409)
Actuarial gain on
defined benefit
scheme (net of
tax) - - - - 8,133 8,133
Equity dividends - - - - (4,444) (4,444)
At 30 September
2018 1,532 5,270 (41) 2,249 179,666 188,676
=================== ==================== ============== ============== ============= ========
Share Revaluation ESOP Other Retained
capital reserve reserve reserves earnings Total
GBP GBP GBP GBP
000 GBP 000 000 000 GBP 000 000
At 1 October 2016 1,532 5,270 (155) 6,878 150,523 164,048
Total recognised
income and
expense for the
year - - - - 10,599 10,599
Funding of
employee share
option
scheme - - (2) - - (2)
Amortisation of
employee share
option scheme - - 73 - - 73
Unrealised loss
on hedges (net
of tax) - - - (1,338) - (1,338)
Actuarial gain to
defined benefit
scheme (net of
tax) - - - - 7,087 7,087
Adjustment to
reserves - - - 118 (118) -
Equity dividends - - - - (4,229) (4,229)
------------------- -------------------- -------------- -------------- ------------- --------
At 30 September
2017 1,532 5,270 (84) 5,658 163,862 176,238
=================== ==================== ============== ============== ============= ========
Consolidated Statement of Cash Flows 2018 2017
for the year ended 30 September 2018 GBP 000 GBP 000
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 16,694 14,723
Depreciation and amortisation charges 11,242 10,695
Share based reward charges 52 73
Gain on revaluation of investment property (310) (40)
Pension operating charge less contributions
paid 1,196 1,607
Profit on sale of fixed assets (1) (4)
--------- ---------
Operating cash flows before movement in
working capital 28,873 27,054
Working capital adjustments:
Increase in inventories (267) (863)
Decrease in trade and other receivables 671 892
Increase in trade and other payables 125 1,230
--------- ---------
Net movement in working capital 529 1,259
Interest paid (1,368) (1,250)
Capitalised interest paid - (172)
Preference dividends paid (9) (9)
Income taxes paid (1,045) (421)
--------- ---------
Net cash flows from operating activities 26,980 26,461
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (14,705) (14,252)
Investment in intangible assets (168) (836)
Net proceeds from disposal of fixed assets 1 4
--------- ---------
Net cash flows used in investing activities (14,872) (15,084)
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid (4,444) (4,229)
Dividends paid to non-controlling interest (51) (59)
Deposit interest received 28 3
Proceeds of borrowings - 18,000
Repayment of borrowings - (18,943)
--------- ---------
Net cash flows used in financing activities (4,467) (5,228)
Net increase in cash and cash equivalents 7,641 6,149
Cash and cash equivalents at beginning
of year 8,076 1,925
Effect of foreign exchange rates 18 2
Cash and cash equivalents at end of year 15,735 8,076
A presentational change to the 2017 figures has arisen as a
result of elements previously embedded within cost of sales and
finance costs being reclassified and shown in revenue. There has
been no impact on profit.
Notes to the accounts
Year ended 30 September 2018
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc,
for the year ended 30 September 2018, 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 2019.
The Group has considerable financial resources together with a
large number of customers both corporate and individual. As a
consequence, the directors believe that the Group is well placed to
manage its business risks successfully. The directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going-concern basis in
preparing the financial statements.
Segmental information
Revenue and profit information are analysed between the business segments
as follows:
2018 2018 2018 2017 2017 2017
External Internal Total External Internal Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Energy 82,332 133 82,465 80,408 143 80,551
Building Services 4,823 876 5,699 3,976 915 4,891
Retail 13,571 56 13,627 12,888 37 12,925
Property 2,277 604 2,881 2,187 599 2,786
Other 2,871 909 3,780 2,626 1,324 3,950
--------- --------- -------- --------- --------- --------
105,874 2,578 108,452 102,085 3,018 105,103
Intergroup elimination (2,578) (3,018)
-------- --------
Revenue 105,874 102,085
-------- --------
Operating profit / (loss)
Energy 13,418 11,651
Building Services (245) 131
Retail 812 731
Property 1,813 1,645
Other 586 525
-------- --------
16,384 14,683
Revaluation of investment properties 310 40
Operating profit 16,694 14,723
-------- --------
A presentational change to the 2017 figures has arisen as a
result of elements previously embedded within cost of sales
(GBP163,000) and finance costs (GBP72,000) being reclassified and
shown in revenue. There has been no impact on profit.
This information is provided by RNS, the news service of the
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END
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