TIDMJEL

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    6 months 
                                             2021        2020 
----------------------------------------  ---------  ----------- 
 Electricity Sales in kWh                   374.9m      371.4m 
 Revenue                                   GBP67.1m    GBP64.2m 
 Profit before tax                         GBP10.5m    GBP10.0m 
 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)                            GBP5.9m    GBP(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 GBP67.1m, 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 GBP10.5m was GBP0.5m higher than 2020 primarily due to a rise in Property and Retail profits. Cost of sales at GBP41.7m was GBP2.5m 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 GBP14.1m were marginally lower than last year. The taxation charge in the period of GBP2.2m was GBP0.1m 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 GBP5.9m compared to GBP2.9m of net debt at this time last year (and GBP5.5m 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 GBP52.0m were GBP1.8m 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 GBP9.2m was GBP0.1m 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 GBP10.7m (2020: GBP9.6m) and profits rose by GBP0.2m to GBP1.0m 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 GBP0.8m was GBP0.3m higher than last year, as we had an accelerated depreciation charge for air conditioning equipment of GBP0.4m, in our Powerhouse building, in the same period last year. JEBS, our building services unit, saw external revenue falling GBP0.3m to GBP1.6m and profitability at breakeven level compared to a profit of GBP0.1m last year. Our remaining business units produced profits of GBP0.3m being marginally behind that delivered in 2020.

Liquidity and cashflow

Net cash generated in the period was GBP0.4m (2020: GBP2.2m) post the continued investment in infrastructure of GBP4.8m (2020: GBP5.1m). The net debt figure of GBP2.9m at 31 March 2020 moved to a net cash figure of GBP5.9m at 31 March 2021 (being net cash of GBP5.5m at 30 September 2020). Net cash consists of GBP30.0m of long-term debt offset by cash and cash equivalents of GBP35.9m.

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 GBP17.1m, compared to a surplus of GBP7.3m at 30 September 2020 (and a surplus of GBP14.3m at 31 March 2020). Since the last financial year end, scheme liabilities have materially decreased by approximately GBP10m (to GBP140m). 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 GBP1m (to GBP157m). 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 GBP22m, compared to the total net asset value, on our Consolidated Balance Sheet, of around GBP206m. 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                GBP 000               GBP           GBP 
                                                                                             000           000 
 Revenue                                             2                  67,098            64,198       111,747 
 Cost of sales                                                        (41,743)          (39,287)      (69,695) 
                                                           -------------------  ----------------  ------------ 
                                                                                             24, 
 Gross profit                                                           25,355               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) 
                                                                       GBP 000               GBP           GBP 
                                                                                             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 GBP221k, with no impact on Group operating profit.

Condensed Consolidated Balance Sheet (Unaudited)

 
                                       Note          As at 31       As at     As at 30 
                                                        March    31 March    September 
                                                         2021        2020         2020 
                                                       GBP000      GBP000       GBP000 
 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 
                                     GBP       GBP 000       GBP    GBP 000    GBP 000   GBP 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      Year 
                                                           March           ended 
                                                                           Sept. 
                                                      2021      2020       2020 
 Cash flows from operating activities                    GBP       GBP    GBP 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 GBP89k. 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                   GBP000     GBP000    GBP000     GBP000     GBP000    GBP000     GBP000     GBP000    GBP000 
 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 GBP221k within Energy, with no impact on Group operating profit.

Notes to the Condensed Interim Accounts (Unaudited)

   3 .         Taxation 
 
                           Six months        Year ended 
                              ended          30 September 
                             31 March 
                           2021      2020            2020 
                         GBP000    GBP000          GBP000 
 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      Year ended 
                                          ended        30 September 
                                        31 March 
                                      2021     2020            2020 
 Dividends per share 
   - paid                            9.70p    9.25p          16.05p 
   - proposed                        7.20p    6.80p           9.70p 
 
 
                                    GBP000   GBP000          GBP000 
 
 Distributions to equity holders     2,972    2,833           4,917 
                                   -------  -------  -------------- 
 

The distribution to equity holders in respect of the final dividend for 2020 of GBP2,972,080 (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                    GBP'000   GBP'000        GBP'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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(END) Dow Jones Newswires

May 13, 2021 09:00 ET (13:00 GMT)

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