Source - LSE Regulatory
RNS Number : 5735Y
Jersey Electricity PLC
13 May 2021
 

  Jersey Electricity plc       

       Interim Management Report

            for the six months ended 31 March 2021

                                                                                                       

 

The Board approved at a meeting on 13 May 2021 the Interim Management Report for the six months ended 31 March 2021 and declared an interim dividend of 7.20p compared to 6.80p for 2020. The dividend will be paid on 25 June 2021 to those shareholders registered in the records of the Company at the close of business on 4 June 2021.

 

The Interim Management Report is attached and will be available to the public on the Company's website www.jec.co.uk/investors/figures-reports.

The Interim Management Report for 2021 has not been audited, or reviewed, by our external auditors, nor have the results for the equivalent period in 2020. The results for the year ended 30 September 2020 were extracted from the statutory accounts. The auditor has reported on those accounts and their report was unmodified. 

 

  

M.P. Magee                                                                          L. Floris

Finance Director                                                                 Company Secretary

 

Direct telephone number: 01534 505201                                      Direct telephone number: 01534 505253

Email: mmagee@jec.co.uk                                                            Email: lfloris@jec.co.uk

                                                                                   

                                                                                               

13 May 2021

 

 

 

The Powerhouse,

PO Box 45,

Queens Road,

St Helier,

Jersey JE4 8NY

 

 

 

 

 

 

 

 

 

Jersey Electricity plc

Unaudited Interim Management Report

for the six months to 31 March 2021

 

Financial Summary

6 months

2021

6 months

2020

Electricity Sales in kWh

374.9m

371.4m

Revenue

£67.1m

£64.2m

Profit before tax

£10.5m

 £10.0m

Earnings per share

  27.00p

  25.95p

Final dividend paid per ordinary share

    9.70p

    9.25p

Proposed interim dividend per ordinary share

    7.20p

    6.80p

Net cash/(debt)

  £5.9m

 £(2.9m)

 

COVID-19 - impact on trading performance

The pandemic continued throughout the period since the end of our last financial year but did not materially impact our overall trading performance. In our Energy business we saw lower unit sales in the hospitality and retail sectors, due to lockdown measures but this was more than offset by increased domestic consumption associated with a combination of "home-working", and a colder winter period than in the previous year. Our other business units have not been greatly affected by the COVID-19 crisis, and as highlighted in our 2020 Annual Report, our Retail business continues to benefit from customers appearing to have more spending power, due to less travel taking place. We will continue to closely monitor the COVID-19 position as it develops, as we cannot be complacent, but our balance sheet, with no gearing, remains strong.     

 

 

Brexit - licensing of French fishing vessels

In early May, post the balance sheet date, there was extensive media coverage of a dispute relating to a new licensing system for French fishing vessels in Jersey waters, introduced under the UK-EU Trade and Cooperation Agreement (TCA).   During this incident, the French Maritime Minister made reference, within the French Parliament, to implementing retaliatory measures, including the possibility of cutting off electricity supplies transported to Jersey via submarine cables.   The Company consider this a political issue to be resolved between the governments.  Furthermore, we have strong relationships with our French partners, EDF (as supplier) and RTE (as network operator), that spans more than 35 years, and benefits from legal and contractual arrangements which cover imported electricity supplies to the end of 2027. Both RTE and EDF have confirmed our existing supply arrangements are unlikely to be impacted.

 

 

Overall trading performance in the 6 months to 31 March

Group revenue, at £67.1m, was 5% higher for the first half of 2020 compared to the same period last year mainly due to a rise in both Energy and Retail revenue. Profit before tax at £10.5m was £0.5m higher than 2020 primarily due to a rise in Property and Retail profits. Cost of sales at £41.7m was £2.5m higher than last year with the rise in wholesale energy costs, and additional stock purchases associated with the increase in Retail revenue being the main factors. Operating expenses at £14.1m were marginally lower than last year. The taxation charge in the period of £2.2m was £0.1m higher than last year due to increased profits. Earnings per share, at 27.00p, were ahead of 25.95p in 2020 due to higher profits. Net cash on the balance sheet, which comprises borrowings less cash and cash equivalents, at 31 March 2021, was £5.9m compared to £2.9m of net debt at this time last year (and £5.5m of net cash at our last year end on 30 September 2020).     

 

 

 

Energy performance

Unit sales of electricity rose 1% from 371m to 375m kWh, compared with the same period last year. The mix of consumption altered from the same period in the prior year with lower sales to the commercial marketplace more than offset by increased domestic consumption associated with "home-working" and colder weather than in the previous year. Revenues in our Energy business at £52.0m were £1.8m higher than in 2020 with the year-on-year increase in unit sales and the 2.5% tariff rise in October 2020 being the primary drivers. Operating profit at £9.2m was £0.1m higher than the corresponding period last year as the increased revenue was largely offset by higher costs including increased wholesale import prices. We imported 96% of our on-island requirement from France and 4% from the Energy from Waste plant, owned by the Government of Jersey. Only 0.3% (around 1m units) of electricity was generated in Jersey using our traditional oil-fired plant (mainly for testing purposes) and we also saw a rising trend in our solar generation albeit still at a relatively low level compared to overall requirements. These importation and generation levels were materially consistent with the same period last year.

 

 

Non-Energy performance

Year-on-year revenue in our Powerhouse retail business, rose by 12% to £10.7m (2020: £9.6m) and profits rose by £0.2m to £1.0m with continued strong revenue growth linked to a combination of factors including a substantial proportion of customers having more disposable income due to an inability to travel, resulting from COVID-19 restrictions. Profit from our Property portfolio at £0.8m was £0.3m higher than last year, as we had an accelerated depreciation charge for air conditioning equipment of £0.4m, in our Powerhouse building, in the same period last year. JEBS, our building services unit, saw external revenue falling £0.3m to £1.6m and profitability at breakeven level compared to a profit of £0.1m last year. Our remaining business units produced profits of £0.3m being marginally behind that delivered in 2020. 

 

 

Liquidity and cashflow

Net cash generated in the period was £0.4m (2020: £2.2m) post the continued investment in infrastructure of £4.8m (2020: £5.1m). The net debt figure of £2.9m at 31 March 2020 moved to a net cash figure of £5.9m at 31 March 2021 (being net cash of £5.5m at 30 September 2020). Net cash consists of £30.0m of long-term debt offset by cash and cash equivalents of £35.9m.

 

 

Forward hedging of electricity and foreign exchange, and customer tariffs

We continue to focus on delivering secure, low-carbon electricity supplies and our goal is to maintain relative stability in customer tariffs, despite volatility in both European wholesale electricity and foreign exchange markets. We are seeing a rising trend in future wholesale prices in Europe, associated with carbon prices reaching record levels, and we continue to monitor this position. Our electricity purchases are materially, albeit not fully, hedged for the period 2021-23. We also have around one third of our expected 2024-27 liabilities hedged at known prices. As these are contractually denominated in the Euro, we enter into forward foreign currency contracts, on a three-year rolling basis, to reduce the volatility of our cost base, and to aid tariff planning. In October 2020 we implemented a 2.5% rise in customer tariffs, largely driven by a rising trend in wholesale electricity prices, which we had delayed from 1 April 2020, in response to the COVID-19 crisis. The tariffs payable by an average customer continue to benchmark well against other jurisdictions. The 'default maximum tariff', introduced by Ofgem (the UK electricity regulator) to cap prices payable in the UK, is set at a level over 35% higher than the average standard domestic tariff in Jersey. 

 

 

 

Pension scheme

The defined benefit pension scheme surplus (without deduction of deferred tax) on our balance sheet at 31 March 2021 stood at £17.1m, compared to a surplus of £7.3m at 30 September 2020 (and a surplus of £14.3m at 31 March 2020). Since the last financial year end, scheme liabilities have materially decreased by approximately £10m (to £140m). This fall was primarily due to an increase to the discount rate assumptions from 1.6% at the last financial year end to 2.1% at 31 March 2021 associated with a rise in UK AA corporate bond yields in the interim. Assets in the Scheme rose by around £1m (to £157m). The defined benefit scheme has been closed to new members since 2013 and the next triennial valuation of the scheme, as at 31 December 2021, will be performed in 2022. 

 

 

Valuation of investment properties

We formally revalue investment properties, using an external valuer, once per annum to coincide with our financial year end, and any movement is reflected in our Income Statement. The value of such properties at 30 September 2020 was around £22m, compared to the total net asset value, on our Consolidated Balance Sheet, of around £206m. We have not revalued at this interim stage being consistent with previous practice. The overall value of our investment properties may have risen, despite uncertainties of COVID-19, due to the restructuring of one of our commercial leases in late March, along with current buoyancy in the residential sector.     

 

 

Dividend

Your Board proposes to pay an interim net dividend for 2021 of 7.20p (2020: 6.80p). As stated in previous years, we continue to aim to deliver sustained real growth each year over the medium-term.  At this time, we do not expect the COVID-19 outbreak to influence our dividend strategy, but we will continue to review the position. The final dividend for 2020 of 9.70p, paid in late March 2021, in respect of the last financial year, was an increase of 5% on the previous year.

 

 

Risk and outlook

The principal risks and uncertainties identified in our last Annual Report, issued in January 2021, have not materially altered in the interim period. We have highlighted earlier in this report, the current Brexit related fishing rights dispute, which will hopefully be resolved in due course. Your Board is satisfied that Jersey Electricity plc has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of approval of this report. Accordingly, we continue to adopt the going concern basis in preparing the condensed financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Responsibility statement

We confirm to the best of our knowledge:

 

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

 

(b) the Interim Directors Statement includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

(c) the Interim Directors Statement includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.8R (disclosure of related party transactions and changes therein); and

 

(d) this half yearly interim report contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this half yearly financial report and the Company undertakes no obligation to update these forward-looking statements. Nothing in this half yearly financial report should be construed as a profit forecast.

 

 

 

 

 

 

 

 

 

C.J. AMBLER - Chief Executive       M.P. MAGEE - Finance Director           13 May 2021

                       

INVESTOR TIMETABLE FOR 2021

 

  4 June

Record date for interim ordinary dividend

25 June

Interim ordinary dividend for year ending 30 September 2021

  1 July

Payment date for preference share dividends

15 December

Preliminary announcement of full year results

 

 

 

 

 

 

 

 

Condensed Consolidated Income Statement (Unaudited)

 

 

 

 

 

 

 

 

 

       Six months ended

 

Year ended

31-Mar

30-Sep

 

 

 

2021

 

2020

 

2020

Note

£ 000

£ 000

£ 000

Revenue

2

 

67,098

 

64,198

 

111,747

Cost of sales

 

 

(41,743)

 

(39,287)

 

(69,695)

Gross profit

 

 

25,355

 

24,911

 

42,052

 

 

 

 

 

 

 

 

Profit on revaluation of investment properties

 

 

-

 

           -              

 

515

Operating expenses

 

 

(14,108)

 

(14,152)

 

(26,360)

Group operating profit

2

 

11,247

 

10,759

 

16,207

Finance income

 

 

26

 

89

 

139

Finance costs

 

 

(779)

 

(806)

 

(1,516)

 

 

 

 

 

 

 

 

Profit from operations before taxation

 

 

10,494

 

10,042

 

14,830

Taxation

3

 

(2,162)

 

(2,064)

 

(3,090)

 

 

 

 

 

 

 

 

Profit from operations after taxation

 

 

8,332

 

7,978

 

11,740

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Owners of the Company

 

 

8,274

 

7,953

 

11,624

Non-controlling interests

 

 

58

 

25

 

116

 

 

8,332

 

7,978

 

11,740

Earnings per share

 

 

 

 

 

 

 

- basic and diluted

 

 

27.00p

 

25.95p

 

37.94p

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

 

 

 

 

 

 

 

£ 000

 

£ 000

 

£ 000

 

 

 

 

 

 

 

 

Profit for the period/year

 

 

8,332

 

7,978

 

11,740

Items that will not be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Actuarial gain/(loss) on defined benefit scheme

 

 

10,499

 

4,503

 

(1,663)

Income tax relating to items not reclassified

 

 

(2,100)

 

(901)

 

333

 

 

 

8,399

 

3,602

 

(1,330)

Items that may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Fair value (loss)/gain on cash flow hedges

 

 

(4,194)

 

(246)

 

1,290

Income tax relating to items that may be reclassified

 

 

839

 

49

 

(258)

 

 

 

(3,355)

 

(197)

 

1,032

 

 

 

 

 

 

 

 

Total comprehensive income for the period/year

 

 

13,376

 

11,383

 

11,442

Attributable to:

 

 

 

 

 

 

 

Owners of the Company

 

 

13,318

 

11,358

 

11,326

Non-controlling interests

 

 

58

 

25

 

116

 

 

 

13,376

 

11,383

 

11,442

                 

 

In 2020 the Directors made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the Directors have reclassified the prior half year reported results, increasing both Operating expenses and Revenue by £221k, with no impact on Group operating profit.

 

 

Condensed Consolidated Balance Sheet (Unaudited)

 

 

Note

 

As at 31 March

2021

£000

 

As at 31 March

2020

£000

 

As at 30 September

2020

£000

Non-current assets

 

 

 

 

 

 

 

Intangible assets

 

 

622

 

589

 

479

Property, plant and equipment

 

 

216,787

 

216,589

 

217,936

Right of use assets

 

 

2,849

 

2,880

 

2,899

Investment property

 

 

21,755

 

21,240

 

21,755

Trade and other receivables

 

 

300

 

350

 

300

Retirement benefit surplus

 

 

17,064

 

14,320

 

7,315

Derivative financial instruments

6

 

-

 

514

 

277

Other investments

 

 

5

 

5

 

5

 

 

 

 

 

 

 

 

Total non-current assets

 

 

259,382

 

256,487

 

250,966

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

 

5,561

 

5,590

 

6,028

Trade and other receivables

 

 

25,461

 

22,658

 

16,645

Derivative financial instruments

6

 

-

 

100

 

960

Cash and cash equivalents

 

 

35,882

 

27,080

 

35,520

 

 

 

 

 

 

 

 

Total current assets

 

 

66,904

 

55,428

 

59,153

 

 

 

 

 

 

 

 

Total assets

 

 

         326,286

 

311,915

 

310,119

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

18,100

 

16,496

 

18,193

Lease liabilities

 

 

66

 

55

 

65

Derivative financial instruments

6

 

818

 

320

 

143

Current tax payable

 

 

3,604

 

3,463

 

2,742

 

 

 

 

 

 

 

 

Total current liabilities

 

 

22,588

 

20,334

 

21,143

 

Net current assets

 

 

 

44,316

 

 

35,094

 

 

38,010

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

23,107

 

21,949

 

22,714

Lease liabilities

 

 

2,847

 

2,847

 

2,879

Derivative financial instruments

6

 

2,282

 

737

 

-

Financial liabilities - preference shares

 

 

235

 

235

 

235

Borrowings

 

 

30,000

 

30,000

 

30,000

Deferred tax liabilities

 

 

28,313

 

27,744

 

27,209

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

87,378

 

83,512

 

83,037

 

 

 

 

 

 

 

 

Total liabilities

 

 

109,966

 

103,846

 

104,180

 

 

 

 

 

 

 

 

Net assets

 

 

216,320

 

208,069

 

205,939

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

 

1,532

 

1,532

 

1,532

Revaluation reserve

 

 

5,270

 

5,270

 

5,270

ESOP reserve

 

 

(99)

 

(45)

 

(120)

Other reserves

 

 

(2,480)

 

(354)

 

875

Retained earnings                                                       

 

 

211,960

 

201,604

 

198,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

         216,183

 

208,007

 

205,816

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

137

 

62

 

123

 

 

 

 

 

 

 

 

Total equity

 

 

216,320

 

208,069

 

205,939

 

 

 

 

Condensed Consolidated Statement of Changes in Equity (Unaudited)

 

 

Share

Revaluation

ESOP

Other

Retained

Total

 

capital

reserve

reserve

reserves

earnings

reserve

 

£ 000 

£ 000 

£ 000 

£ 000 

£ 000 

£ 000 

At 1 October 2020

1,532

5,270

(120)

875

198,259

205,816

Total recognised income and expense for the period

-

-

-

-

8,274

8,274

Amortisation of employee share scheme

-

-

21

-

-

21

Unrealised loss on hedges (net of tax)

-

-

-

(3,355)

-

(3,355)

Actuarial gain on defined benefit scheme (net of tax)

-

-

-

-

8,399

8,399

Equity dividends paid

-

-

-

-

(2,972)

(2,972)

As at 31 March 2021

1,532

5,270

(99)

(2,480)

211,960

216,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 October 2019

1,532

5,270

(45)

(157)

192,882

199,482

Total recognised income and expense for the period

-

-

-

-

7,953

7,953

Unrealised loss on hedges (net of tax)

-

-

-

(197)

-

(197)

Actuarial gain on defined benefit scheme (net of tax)

-

-

-

-

3,602

3,602

Equity dividends paid

-

-

-

-

(2,833)

(2,833)

As at 31 March 2020

1,532

5,270

    (45)

(354)

201,604

208,007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 October 2019

1,532

5,270

(45)

(157)

192,882

199,482

Total recognised income and expense for the year

-

-

-

-

11,624

11,624

Funding of employee share option scheme

-

-

(78)

-

-

(78)

Amortisation of employee share scheme

-

-

3

-

-

3

Unrealised gain on hedges (net of tax)

-

-

-

1,032

-

1,032

Actuarial loss on defined benefit scheme (net of tax)

-

-

-

-

(1,330)

(1,330)

Equity dividends paid

-

-

-

-

(4,917)

(4,917)

As at 30 September 2020

1,532

5,270

(120)

875

198,259

205,816

 

 

Condensed Consolidated Cash Flow Statement (Unaudited)

 

 

Six months ended March

 

Year ended Sept.

 

2021

 

2020

 

2020

Cash flows from operating activities

£ 000

 

£ 000

 

£ 000

Operating profit

11,247

 

10,759

 

16,207

Adjustments to add back / (deduct) non-cash items and items disclosed elsewhere on the CFS:

 

 

 

 

 

Depreciation and amortisation charges

5,363

 

5,726

 

11,424

Share-based reward charges

21

 

-

 

3

Gain on revaluation of investment property

-

 

-

 

(515)

Pension operating charge less contributions paid

838

 

683

 

1,439

Profit on sale of property, plant and equipment

(4)

 

(20)

 

(24)

Operating cash flows before movement in working capital

17,465

 

17,148

 

28,534

Working capital adjustments:

 

 

 

 

 

         Decrease/(increase) in inventories

467

 

428

 

(10)

         (Increase)/decrease in receivables

(8,816)

 

(4,700)

 

1,433

         Increase/(decrease) in payables

1,267

 

(686)

 

1,071

Net movement in working capital

(7,082)

 

(4,958)

 

2,494

Interest paid

(709)

 

(802)

 

(1,376)

Preference dividends paid

(4)

 

(4)

 

(9)

Income taxes paid

(1,371)

 

(1,357)

 

(2,714)

Net cash flows from operating activities

8,299

 

10,027

 

26,929

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of property, plant and equipment

(4,563)

 

(5,021)

 

(10,922)

Investment in intangible assets

(232)

 

(76)

 

(337)

Deposit interest received

26

 

89

 

139

Net proceeds from disposal of fixed assets

4

 

25

 

24

Net cash flows used in investing activities

(4,765)

 

(4,983)

 

(11,096)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Equity dividends paid

(2,972)

 

(2,833)

 

(4,917)

Dividends paid to non-controlling interest

(45)

 

(25)

 

(55)

Purchase of shares for employee benefit trust

-

 

-

 

(78)

Repayment of lease liabilities

(98)

 

(27)

 

(189)

Net cash flows used in financing activities

(3,115)

 

(2,885)

 

(5,239)

 

 

 

 

 

 

Net increase in cash and cash equivalents

419

 

2,159

 

10,594

Cash and cash equivalents at beginning of the period/year

35,520

 

24,915

 

24,915

Effect of foreign exchange rate changes

(57)

 

6

 

11

Cash and cash equivalents at end of the period/year

35,882

 

27,080

 

35,520

 

In 2020 the Directors made a presentational change in relation to deposit interest received, presenting this within investing activities, in compliance with IAS 7 "Statement of Cash Flows". In the prior half year, deposit interest received was presented within financing activities. In order to present the consolidated cash flow statement in a consistent format, the Directors have reclassified prior half year interest received of £89k. The adjustment has had no impact on the half year 2020 reported net increase in cash and cash equivalents.

 

 

 

Notes to the Condensed Interim Accounts (Unaudited)

 

1.         Accounting policies

Basis of preparation

The interim financial statements for the six months ended 31 March 2021 have been prepared on the basis of the accounting policies set out in the 30 September 2020 annual report and accounts using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 'Interim Financial Reporting'. There have been no changes to accounting standards during the current financial period that has impacted the disclosures in these financial statements and the full year financial statements that will be prepared for 30 September 2021.

 

The directors have a reasonable expectation that the Group (being the Company, Jersey Electricity plc and its subsidiary, Jersey Deep Freeze Ltd) 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 interim financial statements.

 

2.         Revenue and profit

 

The contributions of the various activities to Group revenue and profit are listed below:

 

 

Six months ended

Six months ended

Year ended

 

31 March 2021

31 March 2020

30 September 2020

 

External

Internal

Total

External

Internal

Total

External

Internal

Total

Revenue

£000

£000

£000

£000

£000

£000

£000

£000

£000

Energy

51,969

51

52,020

50,138

68

50,206

85,140

122

85,262

Retail

10,725

40

10,765

9,576

35

9,611

17,825

60

17,885

Building Services

1,610

299

1,909

1,897

506

2,403

3,767

1,027

4,794

Property

1,133

322

1,455

1,137

322

1,459

2,266

645

2,911

Other

1,661

425

2,086

1,450

426

1,876

2,749

891

3,640

 

67,098

1,137

68,235

64,198

1,357

65,555

111,747

2,745

114,492

Intergroup elimination

 

 

(1,137)

 

 

(1,357)

 

 

(2,745)

 

 

 

67,098

 

 

64,198

 

 

111,747

Operating Profit

 

 

 

 

 

 

 

 

 

Energy

 

 

9,154

 

 

9,007

 

 

12,257

Retail

 

 

1,012

 

 

824

 

 

1,176

Building Services

 

 

3

 

 

106

 

 

216

Property

 

 

783

 

 

464

 

 

1,270

Other

 

 

295

 

 

358

 

 

773

 

 

 

11,247

 

 

10,759

 

 

15,692

Revaluation of investment properties

 

 

-

 

 

-

 

 

515

 

Operating profit

 

 

11,247

 

 

10,759

 

 

16,207

 

 

          Materially, all of the Group's operations are conducted within the Channel Islands. All transactions between divisions are on an arm's-length basis. The assets and liabilities of the Group are not reported on as there has been no significant movement in the values in the six months to 31 March 2021.

 

In 2020 the Directors made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the Directors have reclassified the prior half year reported results, increasing both Operating expenses and Revenue by £221k within Energy, with no impact on Group operating profit.

 

 

 

 

 

Notes to the Condensed Interim Accounts (Unaudited)

 

3.         Taxation

 

 

Six months ended
31 March

 

Year ended

30 September

 

2021

£000

 

 

2020

£000

 

 

2020

£000

 

Current income tax                  

2,233

 

2,106

 

2,742

Deferred income tax

(71)

 

(42)

 

348

Total income tax

2,162

 

2,064

 

3,090

 

         For the period ended 31 March 2021 and subsequent periods, the Company is taxable at the rate applicable to utility companies in Jersey of 20% (2020: 20%).

 

4.         Dividends paid and proposed

 

 

 Six months ended

    31 March

 

Year ended

30 September

 

2021

 

2020

 

2020

Dividends per share

 

 

 

 

 

   -     paid

9.70p

 

9.25p

 

16.05p

   -     proposed

7.20p

 

6.80p

 

9.70p

 

 

 

 

 

 

 

 

 

 

 

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

Distributions to equity holders

2,972

 

2,833

 

4,917

                                                                                                           

The distribution to equity holders in respect of the final dividend for 2020 of £2,972,080 (9.70p net of tax per share) was paid on 25 March 2021.

 

The Directors have declared an interim dividend of 7.20p per share, net of tax (2020: 6.80p) for the six months ended 31 March 2021 to shareholders on the register at the close of business on 4 June 2021. This dividend was approved by the Board on 13 May 2021 and has not been included as a liability at 31 March 2021.

                     

5.         Pensions

 

In consultation with the independent actuaries to the scheme, the valuation of the pension scheme assets and liabilities has been updated to reflect current market discount rates, current market values of investments and actual investment returns applicable under IAS 19 'Employee Benefits', and consideration has also been given as to whether there have been any other events that would significantly affect the pension liabilities.

 

6.         Financial instruments

 

The Group held the following derivative contracts, classified as level 2 financial instruments at 31 March 2021. 

 

Fair value of currency hedges

 

31 March

 

30 September

 

 

2021

 

2020

 

2020

Derivative assets

 

£'000

 

£'000

 

£'000

Less than one year

 

-

 

100

 

960

Greater than one year

 

-

 

514

 

277

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

 

 

 

Less than one year

 

(818)

 

(320)

 

(143)

Greater than one year

 

(2,282)

 

(737)

 

-

Total net (liabilities) / assets

 

(3,100)

 

(443)

 

1,094

 

 

Notes to the Condensed Interim Accounts (Unaudited)

                                                                                                           

 

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy. This hierarchy is based on the underlying assumptions used to determine the fair value measurement as a whole and is categorised as follows:

 

Level 1 financial instruments are those with values that are immediately comparable to quoted (unadjusted) market prices in active markets for identical assets or liabilities;

 

Level 2 financial instruments are those with values that are determined using valuation techniques for which the basic assumptions used to calculate fair value are directly or indirectly observable (such as to readily available market prices);

 

Level 3 financial instruments are shown at values that are determined by assumptions that are not based on observable market data (unobservable inputs).

 

The derivative contracts for foreign currency shown above are classified as level 2 financial instruments and are valued using a discounted cash flow valuation technique. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

                                                                                                                       

7.         Related party transactions

 

The Government of Jersey (the "Government") treats the Company as a strategic investment. Whilst it holds the majority voting rights in the Company, the Government does not take the view that the Company is under its control and as such, it is not consolidated within the Government accounts. The Government is understood by the Directors to have significant influence but not control of the Company.

 

The Company has elected to take advantage of the disclosure exemptions available in IAS24, paragraphs 25 and 26.

 

All transactions are undertaken on an arms-length basis in the course of ordinary business.

 

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