TIDMJEL
RNS Number : 9488M
Jersey Electricity PLC
14 May 2020
Jersey Electricity plc
Interim Management Report
for the six months ended 31 March 2020
The Board approved at a meeting on 14 May 2020 the Interim
Management Report for the six months ended 31 March 2020 and
declared an interim dividend of 6.80p compared to 6.45p for 2019.
The dividend will be paid on 26 June 2020 to those shareholders
registered in the records of the Company at the close of business
on 5 June 2020.
The Interim Management Report is attached and will be available
to the public on the Company's website
www.jec.co.uk/about-us/investor-relations/financial-figures-and-reports
.
The Interim Management Report for 2020 has not been audited, or
reviewed, by our external auditors nor have the results for the
equivalent period in 2019. The results for the year ended 30
September 2019 were extracted from the statutory accounts. The
auditor has reported on those accounts and their report was
unmodified.
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
14 May 2020
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 2020
Financial Summary 6 months 6 months
2020 2019
---------------------------------------- ---------- ---------
Electricity Sales in kWh 371.4m 356.7m
Revenue GBP64.0m GBP58.9m
Profit before tax GBP10.0m GBP9.3m
Earnings per share 25.95p 23.83p
Final dividend paid per ordinary
share 9.25p 8.80p
Proposed interim dividend per ordinary
share 6.80p 6.45p
Net debt GBP2.9m GBP12.1m
COVID-19 - impact on trading performance
Due to the timing of the Interim Report, the period to end March
was not materially impacted by the COVID-19 outbreak. A Stock
Exchange announcement in response to the crisis was issued to the
market on 31 March. We are continuing to assess trending data on
how revenue, working capital and bad debt provisioning might be
impacted but it is still too early to establish a clear picture. In
our Energy business we are working closely with customers to
provide a level of flexibility on payment terms considering each
situation on a case-by-case basis where those customers have been
directly affected. Bad debts have historically not been a material
issue and in the past we have carried specific provisioning against
known payment issues of around GBP0.1m. We have increased this by a
further GBP0.5m to GBP0.6m in these financial statements and will
refine our methodology as the duration and impact of the COVID-19
crisis becomes clearer. Our other business units generally had a
strong first six months, but we expect there to be a consequential
reduction in revenue in the second half of the year. For example,
our Powerhouse Retail saw a spike in activity around the time of
lockdown but closed its doors at the end of March and is now
trading predominantly online. In our Property business, some
tenants have sought flexibility in rental payments, and we have
again considered each situation on a case-by-case basis. We will
continue to closely monitor the impact of COVID-19 on our full
business but our balance sheet, with cash balances and low levels
of gearing, remains strong.
Overall trading performance in the 6 months to 31 March
Group revenue, at GBP64.0m, was 9% 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 GBP10.0m was
GBP0.8m higher than 2019 with a rise in Energy profits associated
with higher unit sales of electricity at a slightly higher price,
being the main reasons. Cost of sales at GBP39.3m was GBP2.6m
higher than last year with the rise in Energy and Retail revenue
being the main factor. Operating expenses at GBP13.9m were GBP0.9m
higher driven primarily by a GBP0.5m increase in bad debt
provisioning in our Energy business and GBP0.4m of additional
depreciation in our Property business. The taxation charge in the
period of GBP2.1m was GBP0.2m higher than last year due to
increased profits. Earnings per share, at 25.95p, were ahead of
23.83p in 2019 due to higher profits. Net debt on the balance
sheet, which comprises borrowings less cash and cash equivalents,
at 31 March 2020 was GBP2.9m compared to GBP12.1m at this time last
year (and GBP5.1m at our last year end on 30 September 2019).
Energy performance
Unit sales of electricity rose 4% from 357m to 371m kWh,
compared with last year. This had been anticipated as milder
weather was experienced in the prior year period. Revenues in our
Energy business at GBP49.9m were GBP3.3m higher than in 2019 with
the year-on-year increase in unit sales and the 3.5% tariff rise in
April 2019 being the primary drivers. Other income received was
GBP0.8m lower than in 2019 when we received a rebate for subsea
cable repair costs. Operating profit at GBP9.0m was GBP0.9m higher
than in the same period last year due to higher gross margin
associated with higher revenue. 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 0.2% (less than 1m units)
of electricity was generated in Jersey using our own plant due to
the availability of our three subsea cables to France. These
importation and generation levels were consistent with the same
period last year.
Non-Energy performance
Year-on-year revenue in our Powerhouse retail business, rose by
18% to GBP9.6m (2019: GBP8.1m) and profits rose by GBP0.2m to
GBP0.8m with very strong revenue achieved in March linked to
COVID-19, and the resultant need of many of our customers to
acquire computer equipment to aid work homeworking. Profit for our
Property portfolio at GBP0.5m was GBP0.4m lower than last year, due
to accelerated depreciation of air conditioning equipment which is
currently being replaced in our Powerhouse building. JEBS, our
contracting and business services unit, saw a GBP0.3m increase in
external revenue to GBP1.9m and a rise in profitability to GBP0.1m.
Our remaining business units produced profits of GBP0.4m being at a
similar level to that delivered in 2019.
Liquidity and cashflow
Net cash generated in the period was GBP2.2m (2019: GBP2.1m)
post the continued investment in infrastructure of GBP5.1m (2019:
GBP6.4m). The net debt figure fell to GBP2.9m at 31 March 2020
compared to GBP12.1m at this time last year (and GBP5.1m at 30
September 2019). Net debt consists of GBP30.0m of long-term debt
offset by cash balances of GBP27.1m. We also have an unused GBP10m
revolving credit facility and a GBP2m overdraft facility.
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. Our electricity purchases
are materially, albeit not fully, hedged for the period 2020-23. As
these are contractually denominated in the Euro, we enter into
forward foreign currency contracts to reduce the volatility of our
cost base and aid tariff planning. In February 2020 we announced a
below inflation average rise in tariffs of 2.5% from 1 April,
largely driven by a weakening of Sterling relative to the Euro and
other inflationary factors. We subsequently deferred this rise to 1
October in response to the COVID-19 outbreak at an approximate cost
of GBP1m for this financial year. The tariffs payable by an average
customer continue to benchmark well against other jurisdictions.
The 'default maximum tariff', introduced by Ofgem (the electricity
Regulator) to cap prices payable in the UK, is set at a level that
is over 30% higher than the average price a customer would pay in
Jersey.
Pension scheme
The defined benefit pension scheme surplus (without deduction of
deferred tax) on our balance sheet at 31 March 2020 stood at
GBP14.3m, compared to a surplus of GBP10.4m level at 30 September
2019 (and a deficit of GBP3.4m at 31 March 2019). Since the last
financial year end scheme liabilities have materially decreased by
approximately GBP15m (to GBP129m). This fall was primarily due to a
substantial widening of credit spreads in the 6 weeks prior to 31
March resulting in a significant increase in the discount rate
(from 1.9% at the last financial year end to 2.4% at 31 March
2020). Assets in the Scheme fell by around GBP13m (to GBP142m). The
defined benefit scheme has been closed to new members since 2013.
The next triennial valuation of the pension scheme, as at 31
December 2021, will be performed in 2022.
Impact of new accounting standard
Adoption of IFRS 16 has resulted in an increase in Group
operating profit of GBP43,000 (representing a GBP92,000 reduction
in rental expense offset by a GBP49,000 increase in depreciation).
Finance costs have increased by GBP65,000 resulting in a decrease
in Profit from Operations before Taxation of GBP22,000. At 31 March
2020 the net value of right of use assets under IFRS 16 totaled
GBP2.9m with a corresponding lease liability of GBP2.9m. There is
no impact on total cash and cash equivalents.
Dividend
Your Board proposes to pay an interim net dividend for 2020 of
6.80p (2019: 6.45p). As previously stated, 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 as
the impact of COVID-19 becomes clearer through the remainder of
2020. The final dividend for 2019 of 9.25p, paid in late March 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 2020, have not materially altered
in the interim period, except for matters associated with COVID-19
principally concerning reduced demand for electricity, and the
ability of customers to pay. We reported on Brexit considerations
in the 2019 Annual Report and in relation to Brexit, our view has
not altered since then.
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 14 May 2020
INVESTOR TIMETABLE FOR 2020
5 June Record date for interim ordinary dividend
26 June Interim ordinary dividend for year ending 30 September
2020
1 July Payment date for preference share dividends
17 December Preliminary announcement of full year results
Condensed Consolidated Income Statement (Unaudited)
Six months ended Year
ended
31-Mar 30-Sep
2020 2019 2019
Note GBP 000 GBP GBP
000 000
Revenue 2 63,977 58,945 110,294
Cost of sales (39,287) (36,689) (69,282)
-------------- --------- ---------
Gross profit 24,690 22,256 41,012
Other income - 750 750
Profit on revaluation of investment
properties - - 689
Operating expenses (13,931) (13,056) (26,369)
-------------- --------- ---------
Group operating profit 2 10,759 9,950 16,082
Finance income 89 39 103
Finance costs (806) (735) (1,365)
Profit from operations before taxation 10,042 9,254 14,820
Taxation 3 (2,064) (1,911) (2,969)
-------------- --------- ---------
Profit from operations after taxation 7,978 7,343 11,851
Attributable to:
Owners of the Company 7,953 7,302 11,773
Non-controlling interests 25 41 78
-------------- --------- ---------
7,978 7,343 11,851
Earnings per share
- basic and diluted 25.95p 23.83p 38.42p
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
GBP 000 GBP GBP
000 000
Profit for the period/year 7,978 7,343 11,851
Items that will not be reclassified
subsequently to profit or loss:
Actuarial gain/(loss) on defined benefit
scheme 4,503 (7,526) 7,643
Income tax relating to items not reclassified (901) 1,505 (1,529)
-------------- --------- ---------
3,602 (6,021) 6,114
Items that may be reclassified subsequently
to profit or loss:
Fair value loss on cash flow hedges (246) (5,210) (3,007)
Income tax relating to items that may
be reclassified 49 1,042 601
-------------- --------- ---------
(197) (4,168) (2,406)
Total comprehensive income for the period/year 11,383 (2,846) 15,559
Attributable to:
Owners of the Company 11,358 (2,887) 15,481
Non-controlling interests 25 41 78
-------------- --------- ---------
11,383 (2,846) 15,559
Condensed Consolidated Balance Sheet (Unaudited)
Note As at 31 As at As at 30
March 31 March September
2020 2019 2019
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 589 826 683
Property, plant and equipment 216,589 215,533 217,046
Right of use assets 1 2,880 - -
Investment property 21,240 20,460 21,240
Trade and other receivables 350 425 383
Retirement benefit surplus 14,320 - 10,417
Derivative financial instruments 6 514 - 208
Other investments 5 5 5
Total non-current assets 256,487 237,249 249,982
--------------------- ---------- -----------
Current assets
Inventories 5,590 7,423 6,018
Trade and other receivables 22,658 20,506 17,995
Derivative financial instruments 6 100 78 197
Cash and cash equivalents 27,080 17,939 24,915
Total current assets 55,428 45,946 49,125
--------------------- ---------- -----------
Total assets 311,915 283,195 299,107
--------------------- ---------- -----------
Current liabilities
Trade and other payables 16,496 16,014 17,320
Lease liabilities 1 55 - -
Derivative financial instruments 6 320 738 298
Current tax payable 3,463 4,047 2,714
Total current liabilities 20,334 20,799 20,332
--------------------- ---------- -----------
Net current assets 35,094 25,147 28,793
--------------------- ---------- -----------
Non-current liabilities
Trade and other payables 21,949 20,471 21,757
Lease liabilities 1 2,847 - -
Retirement benefit deficit - 3,375 -
Derivative financial instruments 6 737 1,739 303
Financial liabilities - preference
shares 235 235 235
Borrowings 30,000 30,000 30,000
Deferred tax liabilities 27,744 23,369 26,936
Total non-current liabilities 83,512 79,189 79,231
--------------------- ---------- -----------
Total liabilities 103,846 99,988 99,563
--------------------- ---------- -----------
Net assets 208,069 183,207 199,544
--------------------- ---------- -----------
Equity
Share capital 1,532 1,532 1,532
Revaluation reserve 5,270 5,270 5,270
ESOP reserve (45) - (45)
Other reserves (354) (1,919) (157)
Retained earnings 201,604 178,252 192,882
--------------------- ---------- -----------
Equity attributable to owners
of the Company 208,007 183,135 199,482
Non-controlling interests 62 72 62
--------------------- ---------- -----------
Total equity 208,069 183,207 199,544
--------------------- ---------- -----------
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
Share Revaluation ESOP Other Retained Total
capital reserve reserve reserves earnings reserve
GBP GBP 000 GBP GBP 000 GBP 000 GBP 000
000 000
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 2018 1,532 5,270 (41) 2,249 179,666 188,676
Total recognised income
and expense for the period - - - - 7,302 7,302
Funding of employee share
option scheme - - (22) - - (22)
Amortisation of employee
share scheme - - 63 - - 63
Unrealised loss on hedges
(net of tax) - - - (4,168) - (4,168)
Actuarial loss on defined - - - - (6,021) GBP
benefit scheme (net of tax)
Equity dividends paid - - - - (2,695) (2,695)
As at 31 March 2019 1,532 5,270 - (1,919) 178,252 183,135
-------- ------------ ----------- --------- --------- --------
At 1 October 2018 1,532 5,270 (41) 2,249 179,666 188,676
Total recognised income
and expense for the period - - - - 11,773 11,773
Funding of employee share
option scheme - - (20) - - (20)
Amortisation of employee
share scheme - - 16 - - 16
Unrealised loss on hedges
(net of tax) - - - (2,406) - (2,406)
Actuarial gain on defined
benefit scheme (net of tax) - - - - 6,114 6,114
Equity dividends paid - - - - (4,671) (4,671)
As at 30 September 2019 1,532 5,270 (45) (157) 192,882 199,482
-------- ------------ ----------- --------- --------- --------
Condensed Consolidated Cash Flow Statement (Unaudited)
Six months ended Year
March ended
2020 2019 2019
Cash flows from operating activities GBP GBP GBP 000
000 000
Operating profit before exceptional items 10,759 9,950 16,082
Adjustments to add back / (deduct) non-cash
items and items disclosed elsewhere on the
CFS:
Depreciation and amortisation charges 5,726 5,584 11,604
Share based reward charges - 63 16
Gain on revaluation of investment property - - (689)
Pension operating charge less contributions
paid 683 460 1,977
Profit on sale of property, plant and equipment (20) - (2)
Operating cash flows before movement in
working capital 17,148 16,057 28,988
--------- -------- ---------
Working capital adjustments:
Decrease/(increase) in inventories 428 (331) 1,074
Increase in receivables (4,700) (5,226) (2,675)
(Decrease)/increase in payables (686) 1,442 4,023
--------- -------- ---------
Net movement in working capital (4,958) (4,115) 2,422
Interest paid (802) (731) (1,356)
Preference dividends paid (4) (4) (9)
Income taxes paid (1,357) 0 (2,300)
Net cash flows from operating activities 10,027 11,207 27,745
--------- -------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (5,021) (6,381) (13,850)
Investment in intangible assets (76) (60) (90)
Net proceeds from disposal of fixed assets 25 - 2
Net cash flows used in investing activities (5,072) (6,441) (13,938)
--------- -------- ---------
Cash flows from financing activities
Equity dividends paid (2,833) (2,695) (4,671)
Dividends paid to non-controlling interest (25) (22) (69)
Deposit interest received 89 39 103
Repayment of borrowings and lease liabilities (27) - -
Proceeds of borrowings - - -
Net cash flows used in financing activities (2,796) (2,678) (4,637)
--------- -------- ---------
Net increase in cash and cash equivalents 2,159 2,088 9,170
Cash and cash equivalents at beginning of
the period/year 24,915 15,735 15,735
Effect of foreign exchange rate changes 6 116 10
Cash and cash equivalents at end of the
period/year 27,080 17,939 24,915
--------- -------- ---------
Notes to the Condensed Interim Accounts (Unaudited)
1. Accounting policies
Basis of preparation
The interim financial statements for the six months ended 31
March 2020 have been prepared on the basis of the accounting
policies set out in the 30 September 2019 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 has
been one change 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 2020:
IFRS 16 'Leases' has been endorsed by the EU and is effective
for periods commencing on or after 1 January 2019. It replaces IAS
17 'Leases' and sets out the principles for the recognition,
measurement, presentation and disclosure of leases.
For the purposes of the transition when applying IFRS 16, the
Group has adopted the modified retrospective approach, including
the application of the following practical expedients:
-- Reliance on the previous identification of a lease (under the
previous IAS 17 standard) for all contracts that existed on the
date of initial application;
-- Reliance on previous assessments (under IAS 37) on whether
leases are onerous rather than performing an impairment review;
-- The application of a single discount rate to a portfolio of
leases with similar characteristics;
-- Exclusion of initial direct costs from the measurement of the
right-of-use assets at the date of initial application;
-- The measurement of the lease liability as at 1 October 2019
and the creation of an equal value right of use asset as at that
date (where accrual and prepayment adjustments are not
material).
Furthermore, the Group has applied the exemptions within the
standard whereby both leases with a contractual duration of 12
months or less and leases for assets which are deemed "low value"
will continue to be expensed to the income statement over the
remainder of the lease term.
Where the Group is lessor of freehold properties, these leases
have been determined to be operating leases in accordance with the
substance of such lease transactions. The accounting for these
leases does not change following the adoption of IFRS 16 with lease
revenue being recognised on a straight-line basis.
The current lease charges have been used to establish a present
value of the lease liabilities existing as at 1 October 2019. For
the purposes of discounting, the Group has made use of the
practical expedient in selecting the interest rate used. Given the
portfolio of leases materially relate to long term leases of land
for the Group's Energy division it has been determined that the
average rate of 4.47% on the GBP30m borrowings from Pricoa, which
is considered to be incremental rate of borrowing for the Group, is
used in the calculation of the lease liability.
Lease liabilities reconciliation: GBP'000
Operating lease commitments as at 30 September
2019 13,477
Recognition exemption for short term and low value
leases on date of transition (787)
Lease term adjustments and other reconciling items
(net) (5,683)
--------
Non-discounted lease liability under IFRS 16 7,007
Discount effect (4,078)
Total lease liability recognised on 1 October 2019 2,929
--------
The Group has two covenants with its lenders, neither of which
will be materially impacted by IFRS 16.
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 2020 31 March 2019 30 September
2019
External Internal Total External Internal Total External Internal Total
Revenue GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Energy - arising in
the
course of ordinary
business 49,917 68 49,985 46,663 58 46,721 83,907 126 84,033
-
arising
from
the
sale
of
heavy
fuel
oil - - - - - - 2,723 - 2,723
Building Services 1,897 506 2,403 1,573 478 2,051 3,286 809 4,095
Retail 9,576 35 9,611 8,123 22 8,145 15,199 59 15,258
Property 1,137 322 1,459 1,133 302 1,435 2,262 612 2,874
Other 1,450 426 1,876 1,453 437 1,890 2,917 898 3,815
-------------- ---------
63,977 1,357 65,334 58,945 1,297 60,242 110,294 2,504 112,798
Intergroup elimination (1,357) (1,297) (2,504)
63,977 58,945 110,294
----------- ----------- --------
Operating Profit
Energy 9,007 8,155 12,281
Building Services 106 13 (79)
Retail 824 632 895
Property 464 837 1,679
Other 358 313 617
----------- ----------- --------
10,759 9,950 15,393
Revaluation of
investment
properties - - 689
----------- ----------- --------
Operating profit 10,759 9,950 16,082
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 2020.
3 . Taxation
Six months Year ended
ended 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Current income tax 2,106 1,748 2,714
Deferred income tax (42) 163 255
-------- -------- --------------
Total income tax 2,064 1,911 2,969
-------- -------- --------------
For the period ended 31 March 2020 and subsequent periods, the
Company is taxable at the rate applicable to utility companies in
Jersey of 20% (2019: 20%).
4. Dividends paid and proposed
Six months Year ended
ended 30 September
31 March
2020 2019 2019
Dividends per share
- paid 9.25p 8.80p 15.25p
- proposed 6.80p 6.45p 9.25p
GBP000 GBP000 GBP000
Distributions to equity holders 2,833 2,695 4,671
------- ------- --------------
The distribution to equity holders in respect of the final
dividend for 2019 of GBP2,833,284 (9.25p net of tax per share) was
paid on 26 March 2020.
The Directors have declared an interim dividend of 6.80p per
share, net of tax (2019: 6.45p) for the six months ended 31 March
2020 to shareholders on the register at the close of business on 5
June 2020. This dividend was approved by the Board on 14 May 2020
and has not been included as a liability at 31 March 2020.
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 2020.
Fair value of currency hedges 31 March 30 September
2020 2019 2019
Derivative assets GBP'000 GBP'000 GBP'000
Less than one year 100 78 197
Greater than one year 514 - 208
Derivative liabilities
Less than one year (320) (738) (298)
Greater than one year (737) (1,739) (303)
Total net liabilities (443) (2,399) (196)
-------- -------- -------------
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
Jersey Electricity plc conducts a variety of transactions with
the Government of Jersey and its associated entities:
Value of Value of Value of Amounts due Amounts
electricity goods & other goods & services to Jersey due by Jersey
services services purchased Electricity Electricity
supplied supplied by Jersey
by Jersey by Jersey Electricity
Electricity Electricity
Six months ended 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
31 March
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
The Government of
Jersey and related
entities 5,076 4,707 922 963 1,248 947 144 473 - 10
The Government of Jersey is the Group's majority and controlling
shareholder. Related entities include companies that remain wholly
owned by, or controlled by, the Government of Jersey.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FLFFFEFISLII
(END) Dow Jones Newswires
May 14, 2020 08:27 ET (12:27 GMT)
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