TIDMJEL
RNS Number : 5291X
Jersey Electricity PLC
20 December 2023
JERSEY ELECTRICITY Plc
Financial Results Summary
Year Ended 30 September 2023
At a meeting of the Board of Directors held on 20 December 2023,
the final accounts for the year ended 30 September 2023 were
approved and have been published on our website
(www.jec.co.uk).
The financial information set out in this summary does not
constitute the statutory accounts for the year ended 30 September
2023, or 2022, but is derived from those accounts. Statutory
accounts for 2022 have been delivered to the Jersey Registrar of
Companies, and those for 2023 will be delivered in early 2024. The
auditor reported on the accounts for both years and their reports
were unmodified.
A final dividend of 11.40p on the Ordinary and 'A' Ordinary
shares in respect of the year ended 30 September 2023 was
recommended (2022: 10.80p) . Together with the interim dividend of
8.00p (2022: 7.60p) the proposed total dividend declared for the
year was 19.40p on each share (2022: 18.40p).
The final dividend will be paid on 15 March 2024 to those
shareholders registered on 23 February 2024. A dividend on the 5%
cumulative participating preference shares of 1.5% (2022: 1.5%)
payable on 1 July 2024 was also recommended.
The Annual General Meeting will be held on 5 March 2024 at 2.00
pm at the Powerhouse, Queen's Road, St. Helier, Jersey.
L.G. Fulton
Chief Financial Officer
Direct Line: 01534 505270
Mobile Number: 07797 778688
Email: lfulton@jec.co.uk
20 December 2023
The Powerhouse
PO Box 45
Queens Road
St. Helier
Jersey JE4 8NY
JERSEY ELECTRICITY plc
Financial Results Summary
Year ended 30 September 2023
The Chair, Phil Austin, comments:
Performance
The Group has achieved another solid year of operational and
financial performance and is strategically well-positioned for the
future. Wholesale prices have eased in the last year, but they
remain high in relative terms, in what continues to be a
challenging economic environment.
Our Energy Business delivered a Return on Assets of 7.2% in the
year, restoring the under recovery of costs from prior years and
bringing the 5-year rolling average to 6.2% within the target range
of 6%-7%.
We implemented a 5% rise in tariffs in January 2023 to help keep
pace with wholesale prices but, due to our strong hedged position,
and coupled with contractual provisions, we have been able to
significantly shelter Islanders from the recent turmoil in energy
markets. However, whilst wholesale prices have recently come down,
they remain well above our long-term hedged position and therefore
we expect further upward pressure on retail prices over the next
few years.
To give customers some certainty over the coming winter, we
announced a further 12% tariff rise in June, to take effect from
January 2024. As we look forward to 2025 - 2027, approximately one
third of our energy is already hedged at fixed prices and our focus
now is on transitioning our customers through this difficult
period, whilst keeping bills as stable and at as low a cost as
possible.
Our other businesses within the Group continued to perform in
line with expectations, providing consistent year-on-year
return.
The Board has recommended a final dividend for the year of
11.40p, a 6% rise on the previous year, payable on 15 March
2024.
Climate Change
In April 2022, the UK became the first G20 country to introduce
legislation, making it mandatory for large businesses to disclose
climate-related financial information in line with the Taskforce on
Climate-related Financial Disclosures (TCFD) recommendations. At
Jersey Electricity, we have made significant progress towards
establishing our net-zero strategy, together with key priorities,
metrics and targets. Details of our progress are set out on pages
22-33 of the 2023 Annual Report and Accounts.
Energy Security
This year we completed a review of our Supply Security Standard.
The review was driven by the recent energy crisis, the demands of
the Government of Jersey's (GoJ) Carbon Neutral Roadmap
(CNR) and the French fishing dispute of 2021. Following this
review, and subject to securing long-term tenure on our site at La
Collette, the Board has approved a four-year GBP22.6m project to
enhance our on-Island emergency generation capacity at La Collette
Power Station.
While we continue to deploy solar PV across the Island, with a
view to increasing energy sovereignty and long-term supply
diversity, as well as supporting the local economy, we have at the
same time continued more detailed investigations into the viability
of offshore wind generation and how it might integrate into
Jersey's future energy system. We are actively engaging with GoJ to
determine the future approach and role Jersey Electricity Plc
(JE)should play in the development of such a project.
In Conclusion
I am very proud of the response efforts from the JE team and our
customers following storm Ciarán. I wish to thank all our teams and
fellow Board members for their hard work and dedication this past
year, as well as our shareholders for their continued support. We
have achieved much together during what has been a very successful
year, while keeping Jersey Electricity on course to take advantage
of the opportunities the future holds and meet the challenges it
will demand of us.
Financial Performance
Financial Highlights 2023 2022
Revenue GBP125.1m GBP117.4m
Profit before tax GBP14.9m GBP10.6m
Earnings per share 36.81p 27.17p
Dividend paid per share 18.80p 17.80p
Final proposed dividend per share 11.40p 10.80p
Net cash GBP17.4m GBP17.4m
In Year Return on Assets 7.2% 4.2%
Return on Assets - 5 year rolling average 6.2% 6.2%
------------------------------------------- ---------- ----------
2022/23 has seen a return to a less volatile operating
environment following the pandemic. Our hedging strategy for the
procurement of power has protected us against a volatile wholesale
energy market which has seen prices reach over 10 times historical
levels in the same period. Escalating inflation has put pressure on
the cost base as the business continues to maintain performance and
build towards a decarbonised future. Our balance sheet continues to
be healthy underpinned by high quality assets.
Group revenue for the year to 30 September 2023 increased year
on year by GBP7.7m (6.5%) due to tariff price increases in the
Energy Business. Revenue across the wider group remained in line
with the previous financial year.
Group Profit before tax for the year to 30 September 2023 was
GBP14.9m compared to GBP10.6m in 2022. The profit increase is
attributed to GBP1.8m from the energy business and GBP1.6m income
from interest earnings. In the year the energy business received a
rebate of GBP3.6m relating to prior year wholesale energy costs and
following a full review, our property portfolio was devalued by
GBP1.2m.
Underlying profit before tax (excluding the impacts of the
rebate and property valuation) was GBP12.5m in 2023 against GBP9.6m
in 2022.
Energy Business: Operating Profit, excluding the rebate of past
energy costs, at GBP9.3m, was GBP1.8m above the GBP7.5m achieved in
2022. This is due a GBP7.4m increase in revenues, following a
tariff price increase on 1 January 2023 which has been offset by a
GBP5.6m increase in wholesale energy costs and operating costs.
Operating costs have increased due to increased inflation and
increased investment in our systems and people, as we head into a
period of increased capital investment and enhancing our capability
as we continue to achieve our net-zero ambition and supporting the
GoJ in meeting its Carbon Neutral Roadmap objectives and a net-zero
Jersey.
Our 2023 in year Return on Assets (see other information,
Alternative Performance Measures, p127 of the 2023 Annual report
and Accounts) is 7.2% compared to 4.2% in 2022. This increase is
effectively a 'truing up' of prior years under recovery and
includes the rebate on prior year energy costs. We target Return on
Assets to be within a 6% to 7% range over a 5-year rolling average
basis. Our 2023 5-year rolling average Return on Assets is
6.2%.
Property: The GBP1.1m profit in our property division, is
GBP0.3m lower than in 2022 due to one of the commercial spaces
being vacated in March 2023. A new tenant is expected for the space
during early 2024.
Powerhouse.je: Our Powerhouse retail business saw profits fall
22% from GBP1.2m to GBP0.9m, despite a marginal fall in revenues of
1%, due to increased overheads in staff and storage costs.
JEBS: Profits fell by GBP0.1m across our building services
business due to an under recovery in revenue from a
lower-than-expected number of fuel switches. The reduction was due
to a slowing in the pace of switching for a short time as the
government incentive scheme was being launched.
Other business units (Jersey Energy, Jendev, Jersey Deep Freeze
and fibre optic lease rentals) produced combined profits of
GBP0.6m, being GBP0.1m higher than last year.
Net interest income was GBP0.3m in 2023 compared to a net
interest cost of GBP1.3m in 2022 due to a higher level of interest
earned on deposits from rising interest rates. Taxation at GBP3.4m
was higher than the previous year, due to increased taxable
profits.
Group basic and diluted earnings per share, at 36.81p, compared
to 27.17p in 2022, rose due to increased profitability. Dividends
paid in the year, net of tax, rose by 6%, from 17.80p in 2022 to
18.80p in 2023. The proposed final dividend for this year is
11.40p, a 6% rise on the previous year. Dividend cover, at 2 times
has increased from 1.5 times in 2022.
Net cash flows from operating activities at GBP17.6m was GBP3.6m
lower than in 2022. Investing activities, at GBP11.4m, was 3%
higher than the prior financial year. Dividends paid were GBP5.8m
compared to GBP5.5m in 2022. The resultant position was that net
cash at the year-end was GBP17.4m, being GBP30.0m of borrowings
offset by GBP47.4m of cash and cash equivalents, which was the same
as last year.
Consolidated Income Statement for the year ended 30 September
2023
2023 2022
GBP000 GBP000
Revenue 125,078 117,421
Cost of sales (80,924) (77,242)
Rebate of past energy costs - non recurring 3,593 -
item
------------------------------------------------ --------- ---------
Gross Profit 47,747 40,179
Movement in valuation of investment properties (1,215) 1,020
Operating expenses (32,010) (29,293)
------------------------------------------------- --------- ---------
Group operating profit 14,522 11,906
Finance income 1,871 218
Finance costs (1,528) (1,523)
------------------------------------------------- --------- ---------
Profit from operations before taxation 14,865 10,601
Taxation (3,432) (2,135)
Profit from operations after taxation 11,433 8,466
Attributable to:
Owners of the Company 11,280 8,326
Non-controlling interests 153 140
------------------------------------------------- --------- ---------
11,433 8,466
Earnings per share
- basic and diluted 36.81p 27.17p
Consolidated Statement of Comprehensive Income
2023 2022
GBP000 GBP000
Profit for the year 11,433 8,466
Items that will not be reclassified subsequently
to profit or loss:
Actuarial (loss)/gain on defined benefit
scheme (815) 8,976
Income tax relating to items not reclassified 163 (1,795)
--------------------------------------------------- -------- --------
(652) 7,181
Items that may be reclassified subsequently
to profit or loss:
Fair value (loss)/gain on cash flow hedges (3,361) 4,815
Income tax relating to items that may be
reclassified 672 (963)
--------------------------------------------------- -------- --------
(2,689) 3,852
Total comprehensive income for the year 8,092 19,499
Attributable to:
Owners of the Company 7,939 19,359
Non-controlling interests 153 140
--------------------------------------------------- -------- --------
8,092 19,499
Consolidated Balance Sheet as at 30 September 2023
2023 2022
GBP 000 GBP 000
NON-CURRENT ASSETS
Intangible assets 681 967
Property, plant and equipment 216,136 216,235
Right of use assets 3,194 3,280
Investment properties 27,615 28,830
Trade and other receivables 300 300
Retirement benefit asset 25,545 26,434
Derivative financial instruments 129 2,640
Other investments 5 5
----------------------------------------------- -------- ------------------
Total non-current assets 273,606 278,691
----------------------------------------------- -------- ------------------
CURRENT ASSETS
Inventories 9,187 7,173
Trade and other receivables 25,959 19,934
Derivative financial instruments 64 483
Cash and cash equivalents 47,429 47,397
----------------------------------------------- -------- ------------------
Total current assets 82,639 74,987
----------------------------------------------- -------- ------------------
Total assets 356,245 353,678
----------------------------------------------- -------- ------------------
LIABILITIES
Trade and other payables 19,459 21,043
Current tax liabilities 3,301 2,088
Lease liabilities 81 69
Derivative financial instruments 536 330
----------------------------------------------- -------- ------------------
Total current liabilities 23,377 23,530
----------------------------------------------- -------- ------------------
NET CURRENT ASSETS 59,262 51,457
----------------------------------------------- -------- ------------------
NON-CURRENT LIABILITIES
Trade and other payables 26,249 25,162
Lease liabilities 3,193 3,251
Derivative financial instruments 225 -
Financial liabilities - preference shares 235 235
Borrowings 30,000 30,000
Deferred tax liabilities 31,422 32,126
----------------------------------------------- -------- ------------------
Total non-current liabilities 91,324 90,774
----------------------------------------------- -------- ------------------
Total liabilities 114,701 114,304
----------------------------------------------- -------- ------------------
Net assets 241,544 239,374
----------------------------------------------- -------- ------------------
EQUITY
Share capital 1,532 1,532
Revaluation reserve 5,270 5,270
ESOP reserve (35) (38)
Other reserves (455) 2,234
Retained earnings 235,100 230,232
----------------------------------------------- -------- ------------------
Equity attributable to owners of the company 241,412 239,230
Non-controlling interests 132 144
----------------------------------------------- -------- ------------------
Total equity 241,544 239,374
----------------------------------------------- -------- ------------------
Consolidated Statement of Changes in Equity for the year ended
30 September 2023
Share Revaluation ESOP Other Retained Total
capital reserve reserve reserves* earnings
GBP GBP GBP GBP
000 GBP 000 000 000 000 GBP 000
At 1 October 2022 1,532 5,270 (38) 2,234 230,232 239,230
Total recognised income
and expense for the year - - - - 11,280 11,280
Amortisation of employee
share option scheme - - 3 - - 3
Movement on hedges (net
of tax) - - - (2,689) - (2,689)
Actuarial gain on defined
benefit scheme (net of
tax) - - - - (652) (652)
Equity dividends - - - - (5,760) (5,760)
At 30 September 2023 1,532 5,270 (35) (455) 235,100 241,412
======== ================== =========== ========== ============= ========
At 1 October 2021 1,532 5,270 (79) (1,618) 220,178 225,283
Total recognised income
and expense for the year - - - - 8,326 8,326
Amortisation of employee
share option scheme - - 41 - - 41
Movement on hedges (net
of tax) - - - 3,852 - 3,852
Actuarial gain on defined
benefit scheme (net of
tax) - - - - 7,181 7,181
Equity dividends - - - - (5,453) (5,453)
At 30 September 2022 1,532 5,270 (38) 2,234 230,232 239,230
======== ================== =========== ========== ============= ========
*'Other reserves' represents the foreign currency hedging
reserve.
Consolidated Statement of Cash Flows for the year ended 30
September 2023
2023 2022
GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 14,522 11,906
Depreciation and amortisation charges 11,581 11,094
Share based reward charges 3 41
Loss/(gain) on revaluation of investment
property 1,215 (1,020)
Pension operating charge less contributions
paid 73 1,303
Deemed interest income from hire purchase
arrangements 183 50
Profit on sale of property, plant and
equipment (3) (7)
----------------------------------------------- --------- ---------
Operating cash flows before movement in
working capital 27,574 23,367
Working capital adjustments:
Increase in inventories (2,014) (257)
Increase in trade and other receivables (3,835) (1,926)
(Decrease)/increase in trade and other
payables (617) 4,444
----------------------------------------------- --------- ---------
Net movement in working capital (6,466) 2,261
Interest paid (1,368) (1,380)
Preference dividends paid (9) (9)
Income taxes paid (2,089) (3,020)
----------------------------------------------- --------- ---------
Net cash flows from operating activities 17,642 21,219
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (13,046) (11,001)
Investment in intangible assets (92) (319)
Deposit interest received 1,688 168
Net proceeds from disposal of fixed assets 3 7
----------------------------------------------- --------- ---------
Net cash flows used in investing activities (11,447) (11,145)
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid (5,760) (5,453)
Dividends paid to non-controlling interest (165) (154)
Repayment of lease liabilities (242) (206)
----------------------------------------------- --------- ---------
Net cash flows used in financing activities (6,167) (5,813)
Net increase in cash and cash equivalents 28 4,261
Cash and cash equivalents at beginning
of year 47,397 43,136
Effect of foreign exchange rates 4 -
---------------------------------------------- --------- ---------
Cash and cash equivalents at end of year 47,429 47,397
Notes to the accounts
Year ended 30 September 2023
1. Basis of Preparation
The consolidated financial statements of Jersey Electricity plc,
for the year ended 30 September 2023, 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). This is consistent with the accounting policies in the 30
September 2022 annual report and accounts and the 31 March 2023
interim report.
While the financial information included in this summary
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. Full
financial statements that comply with IFRS have additionally been
published on our website; www.jec.co.uk.
Segmental information
Revenue and profit information are analysed between the business
segments as follows:
2023 2023 2023 2022 2022 2022
External Internal Total External Internal Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Energy - arising during the
course of ordinary business 97,053 89 97,142 89,683 100 89,783
Building Services 3,349 831 4,180 3,365 780 4,145
Retail 18,514 56 18,570 18,695 41 18,736
Property 2,350 641 2,991 2,345 639 2,984
Other* 3,812 466 4,278 3,333 625 3,958
-------------------------------------- --------- --------- -------- --------- --------- --------
125,078 2,083 127,161 117,421 2,185 119,606
Intergroup elimination (2,083) (2,185)
-------------------------------------- --------- --------- -------- --------- --------- --------
Revenue 125,078 117,421
Operating profit
Energy profit before rebate
of past energy costs** 9,329 7,502
Rebate of past energy costs 3,593 -
-------------------------------------- --------- --------- -------- --------- --------- --------
Energy profit including rebate 12,922 7,502
Building Services 162 266
Retail 917 1,174
Property 1,149 1,436
Other* 587 508
-------------------------------------- --------- --------- -------- --------- --------- --------
15,737 10,886
Revaluation of investment properties (1,215) 1,020
-------------------------------------- --------- --------- -------- --------- --------- --------
Operating profit 14,522 11,906
*Other segment includes the divisions of Jersey Energy, Jendev
as well as Jersey Deep Freeze Limited, the Group's sole
subsidiary.
Materially, all the Group's operations are conducted within the
Channel Islands. All transfers between divisions are on an
arms-length basis. The revaluation of investment properties is
shown separately from Property operating profit.
Revenues disclosed by the business segments above are recognised
both on a point in time and over time basis. The treatment of
revenue recognition in accordance with IFRS 15 is detailed for each
of these business segments in note 1 in the full version of these
financial statements.
**During the year ended 30 September 2023, the Company received
a credit which has been disclosed as 'Rebate of past energy costs -
non-recurring item' within gross profit in these financial
statements. This was a rebate from the French network operator
(RTE) in respect of payments made in 2022 which they were
instructed to return to us as part of a regulatory decision due to
volatility in the energy marketplace during 2022. Due to the
unknown timing, amount and eligibility regarding this
reimbursement, it was not possible to disclose this rebate in
relation to the prior year ending 30 September 2022.
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END
FR EAXAEALNDFFA
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