Source - RNS
RNS Number : 8017K
Northern Electric Finance PLC
26 September 2016
 

 

 

 

 

 

NORTHERN ELECTRIC FINANCE plc

HALF-YEARLY FINANCIAL REPORT

SIX MONTHS ENDED 30 JUNE 2016

 

  


Page

Interim Management Report

1

Condensed Statement of Profit or Loss

4

Condensed Statement of Profit or Loss and Other Comprehensive Income

4

Condensed Statement of Financial Position

5

Condensed Statement of Changes in Equity

6

Condensed Statement of Cash Flows

7

Notes to the CONDENSED Financial Statements

8

 


 

Cautionary Statement

 

This interim management report has been prepared solely to provide additional information to shareholders to assess the business of Northern Electric Finance plc (the "Company") and should not be relied on by any other party or for any other purpose.

 

Operations

 

The Company is part of the Northern Powergrid Holdings Company group of companies (the "Northern Powergrid Group") and is a subsidiary of Northern Powergrid (Northeast) Limited ("NPg Northeast"). The Company's principal activity during the six months to 30 June 2016 was to act as the issuer of long-term bonds.

 

Results for the six months ended 30 June 2016

 

During the period ended 30 June 2016, the Company made a loss after tax of £0.1 million (period ended 30 June 2015: loss of £0.1 million).

 

The half-yearly accounts for the six months ended 30 June 2016 are prepared under International Financial Reporting Standards. The half-yearly accounts do not comprise statutory accounts required to be delivered to the Registrar of Companies under the Companies Act 2006 and have not been subject to audit or review by the Company's auditor. The Company will deliver its statutory accounts for the current financial year ending on 31 December 2016 to the Registrar of Companies by 30 June 2017.

 

There were no significant events during the period ended 30 June 2016 such that there was no material impact on the financial statements and the Company met its obligations to make the annual interest payment on its 2035 debt securities on 4 May 2016. The annual interest payment on the Company's 2020 debt securities is due to be paid on 17 October 2016.

 

Key financials

 

A summary of the key financial results is set out below:

 

Income statement

 

Investment income and finance costs were in line with the same period in the prior year.

 

Cash flow

 

Cash equivalents as at 30 June 2016 were in line with the position at 31 December 2015.



 

Financial position

 

The loss after tax at £0.1 million was in line with the same period in the prior year.

 

Related party transactions

 

Details of the related party transactions entered into by the Company and changes therein are included in Note 6 to this half-yearly financial report.

 

Dividends

 

No ordinary dividends were paid in the period such that reserves were reduced by the loss of £0.1 million.

 

Risks and uncertainties

 

The principal risk facing the Company for the remainder of 2016 is not having sufficient liquidity to enable the Company to meet its liabilities as they fall due and to provide adequately for contingencies. In this respect, borrowing facilities are made available to the Company by other companies in the Northern Powergrid Group, if required.

 

Interest on the fixed interest rate loans exposes the Company to fair value interest rate risk. The loans are non-secured and the Company has no undrawn committed borrowing facilities.

 

As at 30 June 2016, 100% of the Company's long-term borrowings were at fixed rates and the average maturity for these borrowings was 13 years. No material currency risks are faced by the Group and it is policy that no trading in financial instruments should be undertaken.

 

Further information on the principal long-term risks and uncertainties and the internal control system are included in Northern Powergrid Holdings Company's annual reports and accounts for the year to 31 December 2015, which is available at www.northernpowergrid.com.

 

It is anticpated that these risks will continue for the remaining six months of 2016.

 

Going concern

 

In the Company's latest annual reports and accounts for the year to 31 December 2015 the directors set out a number of factors taken into account when considering continuing to adopt the going concern basis in preparing that annual report and accounts.

 

The directors confirm that no events have occurred during the six months to 30 June 2016, which alter the view expressed in the Company's annual report and accounts for the year to 31 December 2015.

Future strategy and objectives

 

The Company will continue to act as the issuer of long-term debt securities.

Responsibility Statement

 

The directors confirm that to the best of their knowledge:

 

(a)        the condensed set of finanical statements has been prepared in accordance with IAS 34, "Interim Financial Reporting", and gives a true and fair view of the assets, liabilities, financial position and profit of the Company for the six months to 30 June 2016; and

 

(b)        the interim management report contains a fair review of the important events that have occurred during the first six months of the year and their impact, if any, on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year.

 

By order of the board

 

 

 

 

T E Fielden

Director

 

23 September 2016


 

 

 

Six months ended 30 June 2016

 

Six months ended 30 June 2015

 

 

 

(unaudited)

 

(unaudited)

 

 

 

£m

 

£m

 

CONTINUING OPERATIONS

 

 

 

 

 

Finance income

 

8.5

 

8.5

 

Finance costs

 

(8.6)

 

(8.6)

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX

 

(0.1)

 

(0.1)

 

 

 

 

 

 

 

Income tax

 

-

 

-

 

 

 

 

 

 

 

LOSS FOR THE PERIOD

 

(0.1)

 

(0.1)

 

 

 

 

CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2016

 

There is no other comprehensive income for the Company for the six months to 30 June 2016 or the comparative six month period in 2015 other than the losses reported above.


 

 

30 June 2016

 

31 December 2015

 

(unaudited)

 

 

 

£m

 

£m

ASSETS

 

 

 

NON-CURRENT ASSETS

 

 

 

Trade and other receivables

248.0

 

248.0

 

 

 

 

CURRENT ASSETS

 

 

 

Trade and other receivables

9.2

 

3.4

Tax receivable

0.1

 

-

Cash and cash equivalents

-

 

1.5

 

 

 

 

 

9.3

 

4.9

 

 

 

 

TOTAL ASSETS

257.3

 

252.9

 

 

 

 

EQUITY

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

Called up share capital

0.1

 

0.1

Retained earnings

(1.3)

 

(1.2)

 

 

 

 

TOTAL EQUITY

(1.2)

 

(1.1)

 

 

 

 

LIABILITIES

 

 

 

NON-CURRENT LIABILITIES

 

 

 

Borrowings

247.3

 

247.2

Deferred tax

0.2

 

0.1

 

 

 

 

 

247.5

 

247.3

 

 

 

 

CURRENT LIABILITIES

 

 

 

Borrowings

11.0

 

6.7

 

 

 

 

TOTAL LIABILITIES

258.5

 

252.9

 

 

 

 

TOTAL EQUITY AND LIABILITIES

257.3

 

257.1

 

 

 

 

The half-yearly financial statements were approved by the board of directors and authorised for issue on 23 September 2016 and were signed on its behalf by:

 

 

 

 

T E Fielden

Director

 


 








Share


Retained


Total


Capital


Earnings


Equity


£m


£m


£m







 

Balance at 1 January 2016

0.1


(1.2)


(1.1)

 

Comprehensive income for the period (unaudited)

-


(0.1)


(0.1)







Balance at 30 June 2016 (unaudited)

0.1


(1.3)


(1.2)

 

 








Share


Retained


Total


Capital


Earnings


Equity


£m


£m


£m







 

Balance at 1 January 2015

0.1


(1.1)


(1.0)

 

Comprehensive income for the period (unaudited)

-


(0.1)


(0.1)







Balance at 30 June 2015 (unaudited)

0.1


(1.2)


(1.1)

 

 








Share


Retained


Total


Capital


Earnings


Equity


£m


£m


£m







 

Balance at 1 January 2015

0.1


(1.1)


(1.0)

 

Comprehensive income for the period

-


(0.1)


(0.1)







Balance at 31 December 2015

0.1


(1.2)


(1.1)


 

 

 

6 Months ended 30 June 2016

 

6 Months ended 30 June 2015

 

 

(unaudited)

 

(unaudited)

 

 

£m

 

£m

 

 

 

 

 

 

Cash generated from operations

-

 

-

 

 

 

 

 

 

Net interest paid

(5.1)

 

(5.1)

 





 

Net cash used in operating activities

(5.1)

 

(5.1)

 

 

 

 

 

 

Financing activities

 

 

 

 

Movement in loan from group undertakings

3.6

 

3.5

 





 

Net cash generated from financing activities

3.6

 

3.5

 

 

 

 

 

 

 

 

 

 

 

Net decrease in cash equivalents

(1.5)

 

(1.6)

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

1.5

 

1.6

 

 

 

 

 

 

Cash and cash equivalents at end of period

-

 

-

 

 

 


1.      GENERAL INFORMATION

 

The information included within these condensed financial statements for the year ended 31 December 2015 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts and that report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

2.      ACCOUNTING POLICIES

 

Basis of preparation

The annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Going concern

In the Company's latest annual report and accounts for the year to 31 December 2015 the directors set out a number of factors taken into account when considering continuing to adopt the going concern basis in preparing that annual report and accounts.

 

The directors confirm that no events have occurred during the six months to 30 June 2016, which alter the view expressed in the Company's annual report and accounts for the year to 31 December 2015.

 

Changes in accounting policy

The Company's accounting policies and methods of computation are the same as the accounting policies which are described in the Company's financial statements for the year ended 31 December 2015. The Company has not adopted any new or revised accounting standards in the current year.

 

3.      INCOME TAX EXPENSE

 

Tax for the six month period to 30 June 2016 is charged at 20.00% (six months ended 30 June 2015: 20.25%; year ended 31 December 2015: 20.25%), which represents the best estimate of the average annual effective tax rate expected for the full year, as applied to the pre-tax income of the six month period.

 

The Finance No 2 Act 2015 included a provision that the standard rate of corporation tax in the United Kingdom was to reduce from 20% to 19% from April 2017 and to 18% from April 2020. Deferred taxation is measured at the tax rates that apply in the periods in which the temporary differences are expected to reverse based on the tax rates and laws that have been substantively enacted at the statement of financial position date. Accordingly, 18% has been applied when calculating deferred tax assets and liabilities as at 30 June 2016.

3.      INCOME TAX EXPENSE (CONTINUED)

 

The Finance Bill 2016 contains provisions to further reduce the rate of corporation tax to 17% with effect from 1 April 2020. It is expected that the Finance Act 2016 will be substantively enacted in October 2016. As substantive enactment of Finance Act 2016 is after the statement of financial position date the further reduction to the rate of UK corporation tax has been disregarded in calculating the deferred tax position at 30 June 2016.

 

4.      NOTES TO THE CASH FLOW STATEMENT

 


6 Months ended 30 June 2016


6 Months ended 30 June 2015


(unaudited)


(unaudited)


£m


£m





Profit before income tax

(0.1)


(0.1)

Finance costs

8.6


8.6

Finance income

(8.5)


(8.5)

Cash generated from operations

 

-


 

-





 

5.      FINANCIAL INSTRUMENTS

 

Except as detailed in the following table, the directors consider that the carrying value amounts of financial assets and financial liabilities are approximately equal to their fair values:

 

 

Carrying Value

 

Fair Value

 

30 June 2016

 

31 December 2015

 

30 June 2016

 

31 December 2015

 

(unaudited)

 

 

 

(unaudited)

 

 

 

£m

 

£m

 

£m

 

£m

Financial assets

 

 

 

 

 

 

 

Amounts owed by group undertakings

257.2


251.4

 

336.1

 

317.0

 



 




 

Financial liabilities



 




 

Intercompany short-term loan

3.6

 

-

 

3.6

 

-

2020 - 8.875% bonds

105.5


101.0


136.7


130.5

2035 - 5.125% bonds

149.1


152.9


197.6


180.5

 

258.2


 

253.9


337.9


 

311.0

 

 

 

 

 

 

 

 

6.      RELATED PARTY TRANSACTIONS

 

Transactions entered into with related parties and balances outstanding were as follows:

 

 

Interest received from related parties

 

Borrowings owed (to)/from related parties

 

£m

 

£m

Related party

 

 

 

Six months ended 30 June 2016 (unaudited):

 

 

 

Northern Powergrid (Northeast) Limited

8.5

 

257.2

Yorkshire Electricity Group plc

-

 

(3.6)

 

 

 

 

 

8.5

 

253.5

 

 

 

 

Six months ended 30 June 2015 (unaudited):

 

 

 

Northern Powergrid (Northeast) Limited

8.5

 

257.1

Yorkshire Electricity Group plc

-

 

(3.6)

 

 

 

 

 

8.5

 

253.5

 

 

 

 

Year ended 31 December 2015:

 

 

 

Northern Powergrid (Northeast) Limited

17.0

 

251.4

Yorkshire Electricity Group plc

-

 

1.5

 

 

 

 

 

17.0

 

252.9

 

 

 

 

Interest on loans to/from companies within the Northern Powergrid Group is charged at a commercial rate of interest.

 


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