Jersey Electricity PLC

Interim Report

for the six months ended 31 March 2025 

The Board approved at a meeting on 5 June 2025 the Interim Management Report for the six months ended 31 March 2025 and declared an interim dividend of 8.82p compared to 8.40p for 2023/24. The dividend will be paid on 27 June 2025 to those shareholders registered in the records of the Company at the close of business on 13 June 2025.

The Interim Management Report is attached and will be available to the public on the Company's website www.jec.co.uk/investors. 

The Interim Management Report for 2025 has not been audited, or reviewed, by our external auditors, nor have the results for the equivalent period in 2024. The results for the year ended 30 September 2024 were extracted from the statutory accounts. The auditor has reported on those accounts, and their report was unmodified.   

L.G. Fulton                                                                                            A. Welsby

Chief Financial Officer                                                                          Company Secretary 

Direct telephone number: 01534 505270                                       Direct telephone number: 01534 505250

Mobile: 07797 778688                                                                                     

Email: lfulton@jec.co.uk                                                                      Email: awelsby@jec.co.uk 

5 June 2025

The Powerhouse, 

PO Box 45, 

Queen's Road, 

St Helier, 

Jersey JE4 8NY  

Directors' Statement

Jersey Electricity Plc (JE) has delivered a strong set of both operational and financial results for the period 1^st October 2024 to 31^st March 2025.

Operational Performance

In 2023/24, a strategic investment programme was initiated, allocating £180m over five years to improve the energy network and services. This includes three programmes of work: 'The Big Upgrade' with £120m allocated to prepare the network for net zero; a £30m Supply Security programme to enhance supply resilience; and the Long Term Green, Clean Energy initiative focused on implementing our renewables strategy, enabling customers using fossil fuel heating to switch to low carbon electric, and renewing the supply importation contract to purchase low carbon electricity from Europe.

In the first half of 2024/25, significant advancements have been made in the mobilisation and delivery of various programmes. We successfully commissioned our inaugural utility-scale ground-mounted solar array at St Clement, providing up to 4MWp of renewable energy to Jersey. The transformer replacement project at Five Oaks is approaching completion and our La Collette resilience programme is making steady progress. Additionally, we have initiated our reinforcement programme to ensure future capacity for Islanders and are developing cost-effective strategies to facilitate fuel switching for customers.   

Peak Demand was 155Mw and our Customer Minutes Lost remain below 7.

Wholesale Energy Markets and Customer Tariffs

The wholesale energy market continues to improve but remains above historic levels, with the macro-economic landscape still fragile. We continue to maintain financial resilience, and our retail prices are approximately 40% lower than the UK.

Hedging of electricity and foreign exchange

Our focus remains on providing secure, low-carbon electricity and maintaining stable and competitive tariffs. In January 2025, a 7.5% tariff increase was implemented due to higher wholesale market costs and inflationary cost pressures.

Electricity purchases are fixed for the remainder of 2025, and we do not anticipate any further price increases for the remainder of the year. In addition, we are also materially hedged through to the end of 2027 adding further financial resilience and stability for our customers. With contracts denominated in Euros, forward foreign currency contracts are utilised on a rolling three-year basis to reduce cost volatility and assist in tariff planning.

Financial Performance

Group revenue, at £82.3m, was 9% higher for the first half of 2025 compared with £75.6m for the same period last year largely due to an increase in revenue from our Energy business. Profit before tax at £10.5m was in line with prior year (£10.3m). Cost of sales and operating costs increased by 12% year on year recognising the ongoing inflationary pressures.

Energy Performance

Electricity unit sales increased by 2.7% to 365.5 million units from 355.9 million units in the same period last year. We sourced 95.3% from France, 4.4% from Jersey's Energy from Waste plant, and 0.3% was generated locally using oil-fired and solar power. These values are consistent with the previous period.

Revenue in our Energy business at £68.2m was £7.3m higher than in 2024 with the year-on-year increase being largely attributable to a 7.5% tariff rise in January 2025 and a 2.7% increase in unit sales due to the colder than average winter period. Operating profit at £10.3m is £1.7m higher than the same period last year predominantly due to increased operating efficiencies.  We anticipate our year end position to be in line with our targeted range of 6% - 7% Return on Assets (ROA), as measured on a five-year rolling basis.

Non-Energy performance

The overall economic landscape has remained challenging. The Powerhouse retail store experienced a reduction in profit of £0.4m year-on-year, attributed to inflationary cost pressures related to storage and technology investments. Conversely, our property portfolio increased by £0.2m during the period due to the occupation of commercial space at the Powerhouse site. Additionally, our other business segments collectively reported a combined loss of £0.3m, driven by ongoing technology investment and lower than anticipated sales within the period.

Liquidity and cashflow

Net cash on the balance sheet, which comprises cash and cash equivalents less borrowings, at 31 March 2025, was £8.5m compared with £16.7m at this time last year. Net cash consists of cash and cash equivalents of £38.5m offset by £30.0m of long-term debt. This decrease is predominantly due to an increase in Capital Investment expenditure incurred in the delivery our strategic investment programmes.

Pension scheme

The defined benefit pension scheme surplus (without deduction of deferred tax) on our balance sheet at 31 March 2025 stood at £29.9m, compared with a surplus of £28m on 30 September 2024.

Net of deferred tax, the pension surplus, increased by £1.6m, mainly driven by a decrease in assets by 5% over the period versus the decrease in liabilities of the scheme by 8.8%. Assets in the Scheme decreased by £6.0m in the period to £111.3m. Unlike most UK schemes, the Jersey Electricity pension scheme does not pay mandatory annual rises on retirement.  No pension increases were awarded during the period.

Dividends

The Board proposes an interim net dividend of 8.82p for 2025 (2024: 8.40p). We aim for sustained real growth annually over the medium term. The final dividend for 2024 was 12.00p, a 5.3% increase from the previous year, paid in late March.

Risk and Outlook

The principal risks and uncertainties noted in our last Annual Report (published December 2024) remain unchanged.

The JE Board affirms that the business has sufficient resources to operate for at least 12 months from this report's approval date, hence we continue to prepare the condensed financial statements on a going concern basis.

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 looks at 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                 L.G. Fulton - Chief Financial Officer                                                   Director                                                              Director

5 June 2025

Condensed Consolidated Income Statement (Unaudited)

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

Condensed Consolidated Balance Sheet (Unaudited)

Condensed Consolidated Statement of Changes in Equity (Unaudited)

    *'Other reserves represent the foreign currency hedging reserve.

Condensed Consolidated Cash Flow Statement (Unaudited)

Of the £38.5m cash and cash equivalents at 31 March 2025, £35.0m is on fixed term deposits, with an average of 53 days remaining. On 30th September 2024 this was £35.0m with an average of 93 days remaining, whilst on 31st March 2024 the figure was £35.0m with an average of 74 days remaining.

Notes to the Condensed Interim Accounts (Unaudited)

1               Accounting policies

Basis of preparation

 The interim accounts for the six months ended 31 March 2025 have been prepared based on the accounting policies set out in the 30 September 2024 annual report and accounts using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the EU and in accordance with IAS 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 2025.

Jersey Electricity Plc has considerable financial resources and, consequently, the directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The directors have a reasonable expectation that the Group 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 annual financial statements.

2              Revenue and profit

The contributions of the various activities of the Group to turnover and profit are listed below:

*Other segment includes Jersey Energy, Jendev as well as Jersey Deep Freeze Limited, the Company's sole subsidiary.

Materially, all the Group's operations are conducted within the Channel Islands. All transfers between divisions are on an arm's length basis. Gains or losses resulting from 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 in the 30 September 2024 annual report.

3 Taxation

The Company is taxable at the rate applicable to utility companies in Jersey of 20%. (2024: 20%).

4 Dividends paid and proposed

The distribution to equity holders in respect of the final dividend for 2024 of £3,675,852 (12.00p net of tax per share) was paid on 14 March 2025. The Directors have declared an interim dividend of 8.82p per share, net of tax (2024: 8.40p) for the six months ended 31 March 2025 to shareholders on the register at the close of business on 13 June 2025. This dividend was approved by the Board on 5 June 2025 and has not been included as a liability at 31 March 2025.

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, inflation, salary increases, pension increases, post-retirement mortality, current market values of investments and actual investment returns applicable under IAS 19 'Employee Benefits', and also consideration has 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 2025.

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 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 view the Company as being 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 IAS 24, paragraphs 25 and 26.  All transactions are undertaken on an arms-length basis in the ordinary course of business.