Jersey Electricity PLC

Earnings Release • Dec 27, 2024

National Storage Mechanism | Additional information

RNS Number : 4902R

Jersey Electricity PLC

27 December 2024

JERSEY ELECTRICITY Plc

Financial Results Summary

Year Ended 30 September 2024

At a meeting of the Board of Directors held on 18 December 2024, the final accounts for the year ended 30 September 2024 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 2024, or 2023, but is derived from those accounts. Statutory accounts for 2023 have been delivered to the Jersey Registrar of Companies, and those for 2024 will be delivered in early 2025. The auditor reported on the accounts for both years and their reports were unmodified.

A final dividend of 12.00p on the Ordinary and 'A' Ordinary shares in respect of the year ended 30 September 2024 was recommended (2023: 11.40p) . Together with the interim dividend of 8.40p (2023: 8.00p) the total dividend declared for the year was 19.80p on each share (2023: 18.80p).

The final dividend will be paid on 14 March 2025 to those shareholders registered on 21 February 2025. A dividend on the 5% cumulative participating preference shares of 1.5% (2023: 1.5%) payable on 1 July 2025 was also recommended.

The Annual General Meeting will be held on 5 March 2025 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: [email protected]                                                                                    

18 December 2024          

The Powerhouse

PO Box 45

Queens Road

St. Helier

Jersey JE4 8NY

JERSEY ELECTRICITY plc                

Financial Results Summary

Year ended 30 September 2024                                                                                                                                               

The Chair, Phil Austin, comments:

One Hundred Years of Service

In this, our centenary year, we have taken time to reflect on the significant achievements of Jersey Electricity over the past 100 years, from its formation in 1924 at Albert Pier, to the move to the Queens Road Power Station in 1964, the formal opening of La Collette in 1973 and the first undersea cable to France in the mid-1980s - all of these developments followed pivotal and bold decisions, which have served the Island well. Throughout the last century, Jersey Electricity has been at the heart of the Island's transformation, empowering our communities and championing sustainability through resilience and visionary thinking.

Performance

Whilst, in operational terms, the 2023/24 year got off to a very difficult start with Storm Ciarán, the performance of the Group, throughout the year, was a good one.

The ongoing Russia - Ukraine war and the rising tensions in the Middle East continue to create uncertainty in the energy markets and, despite some easing during the year, along with falling inflation, they remain unstable and above historical levels.

Revenue for the Group rose 8.5% in the year to £135.7m, producing a Profit Before Tax of £15.1m. Unit sales of electricity remained flat, with growth in connections and fuel switches being offset by efficiencies. Our Energy Business delivered a Return on Assets of 7.3% in year, delivering an on-target performance of 6.3% on a rolling five-year basis.

All our other businesses continued to perform in line with expectations.

The Board has recommended a final dividend for the year of 12.00p, a rise of 5.3% on the previous year, payable on 14 March 2025.

Delivering safe, reliable, affordable and sustainable energy services

As the challenge of decarbonisation becomes increasingly urgent due to global warming, the need to ensure Jersey continues to have a safe, reliable, affordable, and sustainable energy system becomes all the more imperative.

Jersey Electricity plays a significant role in supporting the Islands' net zero ambitions and has committed to achieving net zero by 2040. In 2023/24, we focused on three major areas to ensure these goals are met.

The Big Upgrade, Supply Security and Long-Term Green, Clean Energy all accelerate this year. The flexibility of the Group's business model allows investment to be targeted to have the greatest impact on net zero as well as creating the most values for all stakeholders.

The Big Upgrade and Supply Security

In 2024, we embarked on one of our largest investment programmes for some time. 'The Big Upgrade' will see JE investing £120m in the electricity network over the next five years, ensuring our network supports the energy transition and is sustainable not just today but long into the future.

We also commenced our resilience programme at La Collette, which will notably enhance the Island's security of supply, and we have also replaced and upgraded the transformers at Five Oaks, which both bolsters resilience and reduces environmental impact by lowering noise levels in the

area.

Long Term Green, Clean Energy

Our renewables strategy continues to progress. We are investigating the impact of an Offshore Wind project for Jersey and assisting the Government when possible.

In 2023/24, we initiated the Solar 5000 campaign with the objective of powering 5,000 homes with solar energy by 2030.

The first solar array at St Clement will be commissioned in January 2025 . It will provide approximately 4MW of electricity to the Island and offers agricultural benefits from the project. We are also continuing to develop our 'Beyond the Meter' services for homes and businesses. Our aim is to develop products and solutions to enable customers to transition from fossil fuels to low carbon energy at an affordable cost.

In Conclusion

In looking back over 100 years of operation, it is amazing to see the how the Company has developed into what it is today - the brave, and sometimes bold, decisions that were taken along the way, and the life-changing technological improvements which could never have been anticipated. Throughout all of that, though, there has been a constant - the dedication, expertise and passion of our staff to provide the best service possible to our customers, at all times. For that, we thank employees, past and present. Finally, I would like to extend my thanks to my fellow Directors for their support and expertise. It is very much appreciated.

Financial Performance

Financial Highlights	2024	2023
Revenue	£135.7m	£125.1m
Profit before tax	£15.1m	£14.9m
Earnings per share	37.92p	36.81p
Dividend paid per share	19.80p	18.80p
Final proposed dividend per share	12.00p	11.40p
Net cash	£19.2m	£17.4m
In Year Return on Assets	7.3%	7.2%
Return on Assets - 5 year rolling average	6.3%	6.2%

Our financial performance in 2023/24 remains strong, with a healthy balance sheet supported by high-quality assets. Our power procurement and hedging strategy has shielded us from the wholesale energy

market volatility in recent years, where prices have soared up to more than tenfold from the historic prices. Despite the challenges posed by the macro-economic climate, which have pressurised the cost base, our financial performance and long-term resilience remains strong.

Group revenue for the year to 30 September 2024 increased year-on-year by £10.6m (8.5%) due to tariff

price increases in the Energy Business. Revenue across the wider group remained materially in line with the previous financial year. Group Profit before tax for the year to 30 September 2024 was £15.1m compared to £14.9m in 2023. The property revaluation impact decreased by £0.3m from a £1.2m reduction in 2023, to £0.9m. Profit before tax excluding the property revaluation and net interest income at £15.3m compared to £15.7m in 2023, predominately due to slightly reduced profits in the Retail and Property Businesses.

Energy Business : Operating Profit at £13.0m, is in line with the prior year. Revenue increased by £11m, following a tariff price increase on 1 January 2024, however, this was offset by a £11m increase in

wholesale energy costs and operating costs. Operating costs increased year-on-year due to a combination of high inflation and continued investment in our people, processes and technology to support growth in our capital, maintenance and IT programmes.

As we embark on our Big Upgrade programme, we have accelerated the replacement of one of our subsea cables. The cable has seen some deterioration, and the cable has been impaired, resulting in a £1.5m charge in the year. Our operating plans have been reviewed should a failure occur and there are no material increases for future operating costs should this occur.

The Energy Business delivered a Return on Assets (ROA) of 7.3% in year, compared to 7.2% in 2023. Our target is to deliver between 6%-7% ROA on a rolling five-year basis. The 2024 rolling 5-year ROA is on target at 6.3%.

Property : The £0.9m profit in our property division, is £0.2m lower than in 2023. In March 2023 one of the commercial spaces at Queens Road was vacated. The new tenant arrived in April 2024, which accounts for the small year-on-year reduction in profit.

Powerhouse.je: Profit in our retail business was £0.6m compared to £0.9m in 2023. This was predominantly due to a fall in revenues following a slower than anticipated year and high inflation affecting storage costs.

JEBS: Profits increased by £0.1m across our building services as the level of activity returned to expected levels following the temporary reduction in the pace of fuel switching 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 £0.4m being £0.1m below last year.

Net interest income was £0.8m in 2024 compared to a net interest income of £0.3m in 2023.

Taxation at £3.4m was in line with the prior year.

Group basic and diluted earnings per share , at 37.92p, comparable to 36.81p in 2023, rose due to increased profitability. Dividends paid in the year, net of tax, rose by 5.3%, from 18.80p in 2023 to 19.80p in 2024. The proposed final dividend for this year is 12.00p, a 5.3% rise on the previous year. Dividend cover, at 1.9 times is broadly in line with 2023.

Net cash at £19.2m was £1.8m higher than in 2023. This increase was due to £6.8m increased net cashflows from operating activities (mainly driven by favourable working capital movements) offset by increased cash in investment activities of £5m.

Consolidated Income Statement for the year ended 30 September 2024		2024 £000		2023 £000
Revenue		135,742		125,078
Cost of sales		(83,184)		(80,924)
Rebate of past energy costs - non recurring item		-		3,593
Gross profit		52,558		47,747
Movement in valuation of investment properties		(890)		(1,215)
Operating expenses		(37,299)		(32,010)
Group operating profit		14,369		14,522
Finance income		2,291		1,871
Finance costs		(1,533)		(1,528)
Profit from operations before taxation		15,127		14,865
Taxation		(3,427)		(3,432)
Profit from operations after taxation		11,700		11,433
Attributable to: Owners of the Company		11,618		11,280
Non-controlling interests		82		153
		11,700		11,433
Earnings per share - basic and diluted		37.92p		36.81p
Consolidated Statement of Comprehensive Income for the year ended 30 September 2024		2024	2023
		£000	£000
Profit for the year		11,700	11,433
Items that will not be reclassified subsequently to profit or loss: Actuarial gain/loss on defined benefit scheme		925	(815)
Income tax relating to items not reclassified		(185)	163
		740	(652)
Items that may be reclassified subsequently to profit or loss: Fair value loss on cash flow hedges		(3,483)	(3,361)
Income tax relating to items that may be reclassified		697	672
		(2,786)	(2,689)
Total comprehensive income for the year		9,654	8,092
Attributable to: Owners of the Company		9,572	7,939
Non-controlling interests		82	153
		9,654	8,092

All results in the year have been derived from continuing operations

Consolidated Balance Sheet as at 30 September 2024

	2024 £000	2023 £000
Non-current assets Intangible assets	364	681
Property, plant and equipment	225,523	216,136
Right of use assets	4,621	3,194
Investment properties	26,725	27,615
Trade and other receivables	300	300
Retirement benefit asset	27,952	25,546
Derivative financial instruments	-	129
Other investments	5	5
Total non-current assets	285,490	273,606
Current assets Inventories	8,435	9,187
Trade and other receivables	24,902	25,959
Derivative financial instruments	-	64
Cash and cash equivalents	49,190	47,429
Total current assets	82,527	82,639
Total assets	368,017	356,245
Current Liabilities Trade and other payables	23,027	19,459
Current tax liabilities	3,413	3,301
Lease liabilities	306	81
Derivative financial instruments	2,601	536
Total current liabilities	29,347	23,377
Net current assets	53,180	59,262
Non-current liabilities Trade and other payables	27,222	26,249
Lease liabilities	3,878	3,193
Derivative financial instruments	1,451	225
Financial liabilities - preference shares	235	235
Borrowings	30,000	30,000
Deferred tax liabilities	30,923	31,422
Total non-current liabilities	93,709	91,324
Total liabilities	123,056	114,701
Net assets	244,961	241,544
Equity Share capital	1,532	1,532
Revaluation reserve	5,270	5,270
ESOP reserve	( 35)	(35)
Other reserves	(3,241)	(455)
Retained earnings	241,391	235,100
Equity attributable to the owners of the Company	244,917	241,412
Non-controlling interests	44	132
Total equity	244,961	241,544

Consolidated Statement of Changes in Equity for the year ended 30 September 2024

	Share Capital	Revaluation reserve	ESOP reserve	Other reserves*	Retained earnings	Total
	£000	£000	£000	£000	£000	£000
At 1 October 2023	1,532	5,270	(35)	(455)	235,100	241,412
Total recognised income and expense for the year	-	-	-	-	11,618	11,618
Movement on hedges (net of tax)	-	-	-	(2,786)	-	(2,786)
Actuarial gain on defined benefit scheme (net of tax)	-	-	-	-	740	740
Equity dividends	-	-	-	-	(6,067)	(6,067)
At 30 September 2024	1,532	5,270	(35)	(3,241)	241,391	244,917
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 loss 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

*'Other reserves' represents the foreign currency hedging reserve.

Consolidated Statement of Cash Flows for the year ended 30 September 2024

	2024 £000	2023 £000
Cash flows from operating activities Operating profit	14,369	14,522
Depreciation, amortisation and impairment charges	14,181	11,581
Share-based reward charges	-	3
Loss on revaluation of investment property	890	1,215
Pension operating charge less contributions paid	(1,481)	73
Deemed interest income from hire purchase arrangements	201	183
Loss/(profit) on sale of property, plant and equipment	1	(3)
Operating cash flows before movement in working capital	28,161	27,574
Working capital adjustments:
Decrease/(Increase) in inventories	752	(2,014)
Increase in trade and other receivables	(1,133)	(3,835)
Increase/(Decrease) in trade and other payables	1,130	(617)
Net movement in working capital	749	(6,466)
Interest paid on borrowings	(1,208)	(1,368)
Preference dividends paid	(9)	(9)
Income taxes paid	(3,301)	(2,089)
Net cash flows from operating activities	24,392	17,642
Cash flows from investing activities Purchase of property, plant and equipment	(18,036)	(13,046)
Investment in intangible assets	(53)	(92)
Deposit interest received	2,090	1,688
Net proceeds from disposal of fixed assets	34	3
Net cash flows used in investing activities	(15,965)	(11,447)
Cash flows from financing activities Equity dividends paid	(6,067)	(5,760)
Dividends paid to non-controlling interest	(170)	(165)
Repayment of lease liabilities	(429)	(242)
Net cash flows used in financing activities	(6,666)	(6,167)
Net increase in cash and cash equivalents	1,761	28
Cash and cash equivalents at the beginning of the year	47,429	47,397
Effect of foreign exchange rate changes	-	4
Cash and cash equivalents at the end of the year	49,190	47,429

IAS 7 'Statement of Cash Flows' requires the explanation of both cash and non-cash movements in assets and liabilities relating to financing activities. Of the £49.2m cash and cash equivalents at 30 September 2024, £35.0m (2023: £40.0m) is on fixed term deposits with an average of 93 days remaining (2023: 70 days).

Notes to the accounts

Year ended 30 September 2024

1.   Basis of Preparation

The consolidated financial statements of Jersey Electricity plc, for the year ended 30 September 2024, 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 2023 annual report and accounts and the 31 March 2024 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.

The business segments below are those reported to the Directors for the purposes of resource allocation and performance assessment:

	2024	2024	2024	2023	2023	2023
	External	Internal	Total	External	Internal	Total
Revenue	£000	£000	£000	£000	£000	£000
Energy - arising during the course of ordinary business	108,102	100	108,202	97,053	89	97,142
Building Services	3,872	936	4,808	3,349	831	4,180
Retail	17,767	110	17,877	18,514	56	18,570
Property	2,346	639	2,985	2,350	641	2,991
Other*	3,655	112	3,767	3,812	466	4,278
	135,742	1,897	137,639	125,078	2,083	127,161
Intergroup elimination			(1,897)			(2,083)
Revenue			135,742			125,078
Operating profit Energy profit before rebate of past energy costs**			13 ,020			9,329
Rebate of past energy costs			-			3,593
Energy profit including rebate			13,020			12,922
Building Services			248			162
Retail			618			917
Property			931			1,149
Other*			442			587
			15,259			15,737
Revaluation of investment properties			(890)			(1,215)
Operating profit			14,369			14,522
Finance income			2,291			1,871
Finance costs			(1,533)			(1,528)
Profit from operations before taxation			15,127			14,865
Taxation			(3,427)			(3,432)
Profit from operations after taxation			11,700			11,433
Attributable to: Owners of the Company Non-controlling interests			11,618 82			11,280 153
			11,700			11,433

*The Other segment includes the divisions of Jersey Energy and Jendev, operating profit from IRU contracts 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. 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.

**During the year ended 30 September 2023, the Company received a credit which was been disclosed as 'Rebate of past energy costs - non-recurring item' within gross profit in these financial statements.

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