Half Yearly Report

Jersey Electricity plc

 Interim Management Report

for the six months ended 31 March 2010

At a meeting of the Board of Directors held on 13 May 2010, the Board approved the Interim Management Report for the Group for the six months ended 31 March 2010 and declared an interim dividend of 81p (101.25p gross) compared to 77p (96.25p gross) in 2009 on the Ordinary and 'A' Ordinary shares. The dividend will be paid on 30 June 2010 to those shareholders registered in the books of the Company on 11 June 2010.

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

The Interim Management Report for 2010 has not been audited or reviewed by our external auditors nor have the results for the equivalent period in 2009. The results for the year ended 30 September 2009 have been extracted from the statutory accounts which had an unqualified audit opinion.

P.J. Routier

Company Secretary

Direct telephone number : 01534 505253

Direct fax number : 01534 505515

Email : [email protected]

13 May 2010

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 2010

Group turnover was 12% higher than 2009 and profit before tax in the first half of 2010 was £7.5m being 34% higher than in the same period last year. Most of this increase in profits came from our non-Energy business units. Earnings per share rose by 34% in line with profits.

Electricity revenues in the first half of 2010 were 8% higher than in 2009. Unit sales volumes were at the same level as last year but revenues increased by the net result of increased tariffs in the last financial year offset by a 5.1% decrease in prices to our customers from January 2010. Energy profits rose from £4.0m in 2009 to £4.4m mainly as a result of lower maintenance costs. Imported electricity met 89% of our requirements during the half year, which was slightly lower than in the previous year.

Despite the tough trading conditions currently prevailing in markets our Retailing business saw year on year revenues rise 12% to £7.6m and profits increase by £0.1m to £0.4m. Profits from our Property portfolio rose by £0.6m to £1.2m due to an increase in rental flows and the settlement of a rent review with one of our tenants back-dated to June 2008. The Building Services business produced profits of £0.1m being at the same level as last year. Our remaining business units produced profits of £1.3m which included £1m received from our associate Newtel for fibre optic lease rentals and the part repayment of a loan written off in 2004 when the investment value was reduced to zero. These additional revenues are largely non-recurring and were associated with the distribution of funds raised by Newtel from the sale of its data centre assets in Guernsey. Interest received at £0.2m was £0.2m lower than last year due mainly to lower interest rates.

Cash, including short-term investments, rose £1.4m to £18.2m during the last six months, with operating cash produced from trading activity offset by £2.4m of electricity infrastructure investment. In terms of capital expenditure, the Western Primary project to reinforce the network in the west of Jersey was completed during this period and the South Hill Primary project was initiated.

Your Board proposes to pay an interim net dividend of 81p (2009: 77p) on the Ordinary and "A" Ordinary Shares payable on 30 June 2010 in addition to the final dividend for 2009 of 118p (2008: 112p) paid on 31 March 2010. Your Board aims to deliver sustained real growth each year and the proposed interim dividend is a 5% year on year increase.

At our Annual General Meeting, Chris Evans, a non-executive director who joined the Board in 1998, retired and the Board would like to thank him for all his help during the last 12 years.

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 Management Report 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 Management Report 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).

(d) This half yearly financial report contains certain forward-looking statements with respect to the operations, performance and financial condition of the Company. 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.

G.J. GRIME - Chairman C.J.AMBLER - Chief Executive 13 May 2010

INVESTOR TIMETABLE FOR 2010

Condensed Consolidated Balance Sheet (Unaudited)

Notes to the Condensed Interim Accounts

1. Accounting policies

Basis of preparation

The interim accounts for the six months ended 31 March 2010 have been prepared on the basis of the accounting policies set out in the 30 September 2009 annual report and accounts using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with IAS 34 'Interim Financial Reporting'.

The Group has considerable financial resources and, as a consequence, the directors believe that the Company 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. Turnover and profit

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

Six months ended Year ended

Materially, all the Group's operations are conducted within the Channel Islands. All transfers between divisions are at an arm's-length basis.

No segmental detail for assets or liabilities has been provided as there has been no material movement from

the detail provided in the annual accounts to the 30 September 2009.

Notes to the Condensed Interim Accounts (Unaudited)

3. Income tax

With effect from the 2009 year of assessment the standard rate of income tax for Jersey companies changed. For the period ended 31 March 2010 and subsequent periods, the company is taxable at the rate applicable to utility companies of 20%.

4. Dividends

The distribution to equity holders in the period consisted of £ 1,807,760 (118p net of tax per share) in respect of the final dividend for 2009. In addition £24,000 was paid by subsidiaries to minority interests for the six months to 31 March 2010.

The Directors have declared an interim dividend of 81p per share, net of tax (2009 - 77p) for the six months ended 31 March 2010 to shareholders on the register at the close of business on 11 June 2010. This dividend was approved by the Board on 13 May 2010 and has not been included as a liability at 31 March 2010.

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 also consideration given as to whether there have been any other events that would significantly affect the pension liabilities. The triennial actuarial valuation of the defined benefits scheme as at 31 December 2009 is currently being finalised which will dictate the applicable future required cash contributions.

Notes to the Condensed Interim Accounts

6. Related party transactions

a) The Company currently leases the La Collette Power Station site from its largest shareholder, the States of Jersey, for a peppercorn rent of £1,000 per annum. This lease was subject to a rent review as at June 2006 and the Company is in dispute with its landlord. The information usually required by IAS 37 Provisions, 'Contingent liabilities and contingent assets', is not disclosed on the grounds that it may prejudice the outcome of the dispute.

b) The Company made electricity sales to the value of £3.8m (2009: £3.6m) and other sales of £0.8m (2009: £0.3m) to the States of Jersey for the six months ended 31 March 2010. At the half-year end the States of Jersey had a debtors balance of £132,000 (2009: £243,000). The States of Jersey made sales to the value of £0.2m (2009:£0.1m) to Jersey Electricity for the six months ended 31 March 2010. In addition to the transactions included above with the States of Jersey, the Company regularly makes payments of income tax, social security, GST (Goods and Services Tax) and other statutory costs.

c) At the half-year end Foreshore Limited had a debtors balance of £119,000 (2009: £152,000). The long-term loan balance at 31 March 2010 was £550,000 (2009: £650,000) repayable to Jersey Electricity on a 'cash available' basis. During the six months to 31 March 2010 the Company made electricity sales of £284,000 (2009: £245,000) and other sales of £366,000 (2009: £382,000) to Foreshore Limited.

d) The Company has a 34% shareholding in Newtel Holdings Limited ("Newtel"). During the six months to 31 March 2010 the Company made electricity sales of £16,000 (2009: £14,000) and received other income of £1,033,000 (2009: £25,000) to Newtel. Newtel had sales of £2,000 (2009: £1,000) to the Company for the six months ended 31 March 2010.

7. Prior year Adjustment - Energy Revenues

In the Annual Report for 2009 it was disclosed that a refinement had been made to the methodology employed to calculate the total number and values of unbilled units of electricity disclosed in our financial statements. For consistency, the Interim Report figures for 2009 have been restated to reflect this change. The impact is an increase in the Energy revenues (and profit) in the Income Statement of £0.3m and the net assets in the Balance Sheet by £2m.