Final Results
25 Abril 2006 - 5:50AM
UK Regulatory
RNS Number:9341B
Northern Electric PLC
25 April 2006
NORTHERN ELECTRIC plc
ANNOUNCEMENT 25 APRIL 2006
PRELIMINARY STATEMENT OF ANNUAL RESULTS AND DIVIDENDS FOR YEAR ENDED 31 DECEMBER
2005
The financial information set out below does not constitute the Group and
Company's statutory accounts for the years ended 31 December 2005 and 31
December 2004. Statutory accounts for the year ended 31 December 2004 have been
delivered to the Registrar of Companies and those for the year ended 31 December
2005 will be delivered to the Registrar of Companies by 31 July 2006. The
Group's auditors have reported on the accounts for the year ended 31 December
2004 and for the year ended 31 December 2005. Their reports were unqualified and
did not contain statements under Section 237(2) or (3) of the Companies Act
1985.
Adoption of International Financial reporting Standards ("IFRS")
From 1 January 2005, Northern Electric plc is required to prepare consolidated
financial statements in accordance with IFRS, which is the required reporting
basis for all European Union listed companies from 2005. Whilst the financial
information included in this preliminary announcement has been computed in
accordance with IFRSs, this announcement does not itself contain sufficient
information to comply with IFRSs.
The Company previously prepared consolidated financial statements in accordance
with UK GAAP until 31 December 2004. UK GAAP differs in certain respects from
IFRS and certain accounting, valuation and consolidation methods have been
amended, when preparing these financial statements, to comply with IFRS. The
comparative figures in respect of 2004 have been restated to reflect these
amendments.
The date of transition to IFRS is 1 January 2004.
Principal Activities & Business Review
Northern Electric plc is a subsidiary of CE Electric UK Funding Company.
The results for the year to 31 December 2005 show a profit before tax of
#111.7m.
The directors recommend that no final dividend is paid in respect of the year.
An interim dividend of 39.16 pence per ordinary share, totalling #50.0m, was
paid on 26 July 2005. The profit transferred to reserves for the year was
#25.1m.
Cash and cash equivalents were #146.5m as at 31 December 2005.
The principal activity of Northern Electric plc during the year was to act as a
holding company.
The activities of its principal subsidiaries during the year were the
distribution of electricity and the provision of engineering contracting
services.
Northern Electric Distribution Limited (NEDL), a wholly owned subsidiary, serves
an area of approximately 14,400 sq km in the north east of England with a
resident population of 3.2 million. NEDL's principal business receives
electricity from the National Grid transmission system and distributes it to
customers, at voltages of up to 132kV, via its own network of transformers,
switchgear and cables.
During the year, NEDL distributed electricity to customers in its distribution
services area and continued to improve the overall performance of its
distribution network through its investment strategy being directed to deliver
targeted improvements in an efficient and cost-effective manner. NEDL also
continued to improve services to its customers by reducing the overall number of
faults and their effects, improving under-performing parts of the high voltage
system, making best use of new equipment, investing in new information systems
and targeting storm resilience investment. The improvements were reflected in
the fact that NEDL outperformed the Ofgem targets for customer minutes lost and
customer interruptions in the 2004/2005 regulatory year by 7.4% and 12.6%
respectively.
Integrated Utility Services Limited (IUS), a wholly owned subsidiary, provided
engineering contracting services to a range of clients during the year,
including Central Networks, Yorkshire Electricity Distribution plc (YEDL), NEDL,
Northern Ireland Electricity and Network Rail.
IUS continued to develop its engineering contracting business throughout the
year, with its main operations being providing electrical upgrade and
refurbishment services to Network Rail and the maintenance and refurbishment of
parts of the electricity distribution networks of YEDL, NEDL and Central
Networks.
On 5 May 2005 Northern Electric Finance plc (NEF), a wholly-owned subsidiary,
issued a #150m 30-year bond at a rate of 5.125% and immediately invested #100m
of the proceeds in a guaranteed investment contract at a rate of 4.75% maturing
on 27 December 2007. On 17 October 2005 NEF redeemed the #100m 8.625% bonds due
2005 in full.
An option over the shares in Northern Electric Generation (TPL) Limited was
granted to ELQ Investors Limited on 28 June 2005.
During the year, the Group's focus on health and safety continued to be of
paramount importance for the directors, as it is for all employees. Providing
and maintaining a safe working environment is the first objective of the
business and there is a continuous drive for improvement in safety performance
through the setting of challenging goals and the pursuit of a programme of
on-site safety audits. NEDL maintained its OSHAS 18001 accreditation and both
NEDL and IUS again received a gold award from the Royal Society for the
Prevention of Accidents for occupational health and safety performance and
provision. The gold status is awarded to recognise the achievement of continued
or improving standards of health and safety over at least a four-year period.
As Principal Employer of the Northern Electric Group of the Electricity Supply
Pension Scheme (the "Scheme"), the Company reached agreement during the year
with the Independent Trustee and Group Trustees to repair the Scheme deficit.
The agreement comprises monthly cash payments of #1.9m (#23.1m per annum) that
started in April 2005. Of these payments, #0.3m (#3.8m per annum) is recovered
by the Group from other participating employers in the Scheme within the CE
Electric UK Funding Company group. These payments address the funding deficiency
of #116.6m over six years and the deficit of #190.3m over 12 years subject to
movements in actuarial assumptions adopted in the triennial valuation as at 31
March 2004.
Future Developments
The directors intend to develop the Group and conduct its business in a manner
that concentrates on its core skills of electricity distribution and engineering
contracting.
Enquiries
Enquiries should be made to John Elliott, Company Secretary, on 0191 2235103.
NORTHERN ELECTRIC plc
ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005
GROUP INCOME STATEMENT
2005 2004
#m #m
Revenue 297.3 287.8
Cost of sales (97.3) (94.1)
Gross profit 200.0 193.7
Distribution costs (54.4) (49.2)
Administrative expenses (18.4) (20.6)
Operating profit 127.2 123.9
Share of profit after tax of joint venture and associate
accounted for using the equity method 0.6 0.5
Other income 4.2 0.1
Investment income 13.1 10.9
Finance costs (33.4) (31.7)
Profit before tax 111.7 103.7
Income tax expense (36.6) (42.4)
Profit from ordinary activities after tax attributed to equity
shareholders of the Company 75.1 61.3
All activities relate to continuing operations.
STATEMENT OF RECOGNISED INCOME AND EXPENSE
There is no other income or expense for the Group other than the profits
reported above.
NORTHERN ELECTRIC plc
ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005
GROUP BALANCE SHEET
2005 2004
#m #m
Non-current assets
Property, plant and equipment 1,009.7 937.2
Intangibles 4.1 6.9
Investments in joint venture and
associate 3.4 3.1
Investments in other companies 13.6 0.1
Long-term securities 100.0 -
Trade and other receivables 2.8 4.8
1,133.6 952.1
Current assets
Inventories 27.9 13.1
Trade and other receivables 53.8 46.2
Cash and cash equivalents 146.5 152.9
228.2 212.2
Total assets 1,361.8 1,164.3
Current liabilities
Trade and other payables (82.1) (51.1)
Current income tax liabilities (16.3) (30.7)
Deferred revenue (7.0) (6.4)
Borrowings (19.4) (118.6)
Provisions (4.7) (8.0)
(129.5) (214.8)
Net current assets/(liabilities) 98.7 (2.6)
Non-current liabilities
Borrowings (346.8) (99.4)
Deferred income tax liabilities (154.9) (142.0)
Retirement benefit obligations (37.3) (66.8)
Deferred revenue (305.4) (278.8)
Provisions (0.7) (0.4)
(845.1) (587.4)
Total liabilities (974.6) (802.2)
Net assets 387.2 362.1
EQUITY
Share capital 72.2 72.2
Share premium 158.8 158.8
Retained earnings 150.0 124.9
Other reserves 6.2 6.2
Total equity 387.2 362.1
NORTHERN ELECTRIC plc
ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2005
GROUP STATEMENT OF CASH FLOWS
2005 2004
#m #m
Net cash from operating activities 57.8 114.3
Investing activities
Dividends received from joint ventures 0.2 0.2
Proceeds/(payments) from disposal of business unit/
associate 2.9 (1.1)
(Purchase)/sale of long term securities (100.0) -
Proceeds from disposal of property, plant and equipment - 0.1
Purchases of property, plant and equipment (104.1) (95.0)
Disposals/(purchases) of intangible assets 0.4 (1.8)
Receipt of customer contributions 36.4 27.6
Net cash used in investing activities (164.2) (70.0)
Financing activities
Equity dividends paid (50.0) -
Movement in borrowings from parent undertakings 94.7 (1.7)
Repayment of borrowings (100.0) -
New borrowings raised 155.3 -
Net cash from/(used in) financing activities 100.0 (1.7)
Net (decrease)/increase in cash and cash equivalents (6.4) 42.6
Cash and cash equivalents at beginning of year 152.9 110.3
Cash and cash equivalents at end of year 146.5 152.9
This information is provided by RNS
The company news service from the London Stock Exchange
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