19th Sep 2008 13:41
NORTHERN ELECTRIC plc
HALF-YEARLY FINANCIAL REPORT
SIX MONTHS ENDED 30 JUNE 2008
NORTHERN ELECTRIC plc: INTERIM MANAGEMENT REPORT
Registered Number: 2366942
Registered Office: Lloyds Court, 78 Grey Street, Newcastle upon Tyne, NE1 6AF
Cautionary Statement
This interim management report has been prepared solely to provide additional information to shareholders to assess the strategies of Northern Electric plc (the "Company") and its subsidiaries (the "Group") and the potential for those strategies to succeed and should not be relied on by any other party or for any other purpose.
Operations
The principal activity of the Company during the six months to 30 June 2008 was to act as a holding company, with its main operating subsidiaries being Northern Electric Distribution Limited ("NEDL") and Integrated Utility Services Limited ("IUS"). NEDL holds an electricity distribution licence serving an area of approximately 14,400 sq km in the north east of England. It receives electricity from the National Grid transmission system and distributes it to the 1.6 million customers connected to its electricity distribution network of transformers, switchgear and overhead and underground cables, at voltages of up to 132kV. NEDL is subject to regulation by the Gas and Electricity Markets Authority, which acts through the Office of Gas and Electricity Markets ("Ofgem"). IUS provides engineering contracting services to a range of clients, including E-on, Network Rail, Scottish Water, Northumbrian Water and Yorkshire Water.
During the six months to 30 June 2008, NEDL distributed electricity to customers in its distribution services area and targeted its investment strategy at delivering improvements in the overall performance of its electricity distribution network in an efficient and cost-effective manner. NEDL's capital expenditure program included activities to refurbish, replace and construct assets such as substations, transformers, switchgear, overhead and underground cables and associated equipment. IUS continued to develop its engineering contracting business and operated as an independent connections provider but has experienced a difficult period in its "multi-utility" business, in parallel with the general, national downturn in the housing market.
The Group has been experiencing a period of industrial action, which commenced on 26 June 2008 and involved the withdrawal of standby and overtime working by its industrial employees. The Group implemented a mitigation plan, the focus of which was on the day to day management of its field operations. The plan included monitoring of those operations and the identification and resolution of issues arising and focused on the performance of the individual work teams, resourcing issues and safety management. Following lengthy discussions and negotiations, the trades unions issued a statement to their members setting out the details of the position reached and recommending that it was the best that could be achieved through the negotiation and conciliation process. The trades unions agreed to withdraw the ban on overtime and standby working with effect from 8 September 2008 and issued ballot papers regarding that offer to their members with a closing date for return of those papers of 19 September 2008.
In respect of its key customer service performance indicators, NEDL stated in the most recent regulatory accounts provided to Ofgem that the initially reported performance for the regulatory year ended 31 March 2008 in respect of its Customer Interruptions ("CI") and Customer Minutes Lost ("CML") targets was as follows:
|
Actual |
Target |
|
|
CML: |
70.5 (2007: 78.2) |
69.4 (2007: 70.4) |
|
CI: |
66.3 (2007: 74.0) |
74.5 (2007: 74.5) |
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Operations (Continued)
The initially reported performance of CML and CI excludes the impact of severe weather events, which are the subject of exemption claims under the exceptional event process made by NEDL to and awaiting approval from Ofgem. It is expected that the results of those exceptional event claims will be confirmed by October 2008.
In addition, during the regulatory year ended 31 March 2008, NEDL achieved a cumulative customer satisfaction score of 88.6%, narrowly missing the Ofgem target of 90%.
The safety of its employees continued to be of paramount importance to the Group, with the on-going focus being on the goal that no employees should be injured during their working time. In this respect, the six months to 30 June 2008 were somewhat disappointing, with the Group having experienced 2 lost time accidents, against an annual target of zero (six months to 30 June 2007: 1) and 11 preventable vehicle accidents, against an annual target of 14 (six months to 30 June 2007: 12). Work continues to reduce the accident rates and the lessons learned from such incidents are incorporated into the Group's safety improvement plan.
Results for the six months ended 30 June 2008
The interim accounts for the six months ended 30 June 2008 consolidate the results of the Company and its subsidiaries and are prepared under International Financial Reporting Standards. The interim accounts do not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985 and have not been subject to audit or review by the Company's auditors.
A summary of the key financial results is set out below:
Key financials
Revenue
Revenue at £138.0m was £6.9m higher than for the six months ended 30 June 2007 mainly due to the net impact of tariff changes implemented by NEDL in the period.
Cash flow
Cash and cash equivalents as at 30 June 2008 were £177.2m which represented an increase of £0.4m when compared with the position at 31 December 2007. Cash inflows from operating activities (£44.8m) and net additional borrowings (£4.6m) were partly offset by cash outflows of £49.0m associated with investing activities.
The Company has access to short-term borrowing facilities provided by Yorkshire Electricity Group plc, a related party, and to committed revolving credit facilities priovided by Lloyds TSB Bank plc and Royal Bank of Scotland plc.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Financial position
Profit before tax at £57.0m was £6.4m higher than the six months ended 30 June 2007 mainly due to higher margins reflecting the impact of the distribution tariff increases and higher returns from the electrical contracting operations.
Dividends
No ordinary dividends were paid in the period resulting in £56.0m being transferred to reserves.
Related party transactions
The Company provides certain corporate functions to the CE Electric UK group of companies (the "CE Group"), including financial and management accounting, financial planning, treasury, taxation, procurement, pensions, internal audit, legal advice, insurance management, claims handling and litigation services. Further details of the related party transactions entered into by the Group and Company are included in Note 3 to this interim management report.
Pensions
The Company is the Principal Employer in the Northern Electric Group of the Electricity Supply Pension Scheme (the "Scheme"), a defined benefit scheme, and, in March 2008, reached agreement with the Group Trustees to repair the Scheme deficit. The agreement comprises monthly cash payments of £2.4m (£28.4m per annum). These payments aim to remove the shortfall of £95.1m by December 2010 subject to the actuarial assumptions adopted for the triennial valuation as at 31 March 2007 being borne out in practice. The next triennial actuarial valuation of the Scheme will take place as at 31 March 2010, with the associated arrangements for repair of the deficit or use of surplus, to be agreed by 31 March 2011. Consequently, it is not expected that the Company's contributions to the Scheme will materially alter until that process is complete. Further details of the Company's pension arrangements can be found in the annual report and accounts to 31 December 2007.
Risks and uncertainties
Regulation
One of the principal risks facing NEDL relates to possible changes in its allowed income as a result of modifications to the price control formulae that are set out within the special conditions of the electricity distribution licence.
On 28 March 2008, Ofgem published its initial consultation document for the forthcoming electricity distribution price control review. That review is likely to change the income that NEDL will be allowed to recover and retain from 1 April 2010 until 31 March 2015. In making proposals to modify the special conditions of the electricity distribution licence, the Gas and Electricity Markets Authority must have regard to, inter alia, the need to secure that licence holders are able to finance their licensed activities.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Regulation (Continued)
On 6 March 2008, Ofgem also announced a review of the regulatory regime for energy networks. This review will not report until 2010 and Ofgem has stated that this review will not affect work for the next price control for electricity distribution. However, it may have consequences for the regulation of electricity distribution charges thereafter.
As the price control formula does not constrain profits from year to year, but is a control on revenue that operates independently of most of NEDL's costs and it has been the practice of Ofgem to review and reset the formula at five-year intervals, it is not expected that such issues will have a material impact on NEDL's performance over the remaining six months of the financial year.
Financial
The Group addresses interest rate risk by having a policy of providing a stable, low cost of financing over time whilst observing approved risk parameters being financed by long-term borrowings at fixed rates and having access to short-term borrowing facilities at floating rates of interest. As at 30 June 2008, 93% of the Group's borrowings were at fixed rates and the average maturity for these borrowings was 23 years.
Despite this position, the Group remains mindful of the current economic climate and the associated potential impact on the cost of its short-term borrowings. No material currency risks are faced by the Group and it is policy that no trading in financial instruments should be undertaken.
Further information on the principal long term risks and uncertainties and the internal control system are included in the Company's latest annual report, which is available at www.ce-electricuk.com.
Short term
Given the regulatory environment in which NEDL operates, as detailed above, the financial risks to NEDL, during the term of the price control, are that changes in most categories of cost incurred by NEDL will have a direct impact on its financial results.
Future strategy and objectives
The Company will continue to develop its business as a holding company in a manner that concentrates on the Group's core skills of electricity distribution and engineering contracting.
NEDL will continue to operate its business with the goal of out-performing the allowances in the distribution price control, while efficiently investing in its electricity distribution system with the aim of improving the quality of supply provided to its customers. The majority of NEDL's distribution revenues for the period to 31 March 2010 have been set by Ofgem.
IUS will look to further develop its engineering contracting business by delivering a high standard of service to its existing clients and pursuing opportunities in the health, education, industrial, chemical and manufacturing sectors.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed set of finanical statements has been prepared in accordance with IAS 34, "Interim Financial Reporting", and gives a true and fair view of the assets, liabilities, financial position and profit of the Group for the six months to 30 June 2008
(b) the interim management report contains a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months of the year and description of the 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 DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the board
P A Jones
Director
19 September 2008
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
CONSOLIDATED INCOME STATEMENT
|
6 Months ended 30 June 2008 |
6 Months ended 30 June 2007 |
Year ended 31 December 2007 |
|||
|
Unaudited |
Unaudited |
Audited |
|||
|
£m |
£m |
£m |
|||
|
Revenue |
138.0 |
131.1 |
282.0 |
||
|
Cost of sales |
(25.8) |
(27.4) |
(64.3) |
||
|
Gross profit |
112.2 |
103.7 |
217.7 |
||
|
Distribution costs |
(33.2) |
(31.8) |
(64.4) |
||
|
Administrative expenses |
(10.4) |
(10.1) |
(22.1) |
||
|
Operating profit |
68.6 |
61.8 |
131.2 |
||
|
Share of profit after tax of joint venture accounted for using the equity method |
0.2 |
0.2 |
0.4 |
||
|
Other gains |
0.1 |
- |
0.2 |
||
|
Investment income |
5.9 |
7.0 |
14.9 |
||
|
Finance costs |
(17.8) |
(18.4) |
(37.7) |
||
|
Profit before tax |
57.0 |
50.6 |
109.0 |
||
|
Income tax expense |
(1.0) |
(5.9) |
(23.0) |
||
|
Profit from ordinary activities after tax |
56.0 |
44.7 |
86.0 |
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE - SIX MONTHS ENDED 30 JUNE 2008
There is no other income or expense for the Group other than the profits reported above. NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
CONSOLIDATED BALANCE SHEET
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
Unaudited |
Unaudited |
Audited |
|||
|
£m |
£m |
£m |
|||
|
Non-current assets |
|||||
|
Property, plant and equipment |
1,224.4 |
1,126.1 |
1,181.3 |
||
|
Intangibles |
5.8 |
7.1 |
6.5 |
||
|
Investments in joint venture |
3.0 |
3.0 |
3.2 |
||
|
Investments in other companies |
0.1 |
0.1 |
0.1 |
||
|
Retirement benefit asset |
72.5 |
25.3 |
44.7 |
||
|
Trade and other receivables |
4.6 |
4.9 |
4.7 |
||
|
1,310.4 |
1,166.5 |
1,240.5 |
|||
|
Current assets |
|||||
|
Inventories |
22.8 |
19.1 |
21.7 |
||
|
Trade and other receivables |
49.1 |
43.2 |
59.5 |
||
|
Short-term securities |
- |
100.0 |
- |
||
|
Cash and cash equivalents |
177.2 |
72.6 |
176.8 |
||
|
249.1 |
234.9 |
258.0 |
|||
|
Total assets |
1,559.5 |
1,401.4 |
1,498.5 |
||
|
Current liabilities |
|||||
|
Trade and other payables |
(81.9) |
(64.6) |
(83.1) |
||
|
Current income tax liabilities |
(14.0) |
(6.9) |
(16.1) |
||
|
Deferred revenue |
(11.9) |
(9.7) |
(10.2) |
||
|
Borrowings |
(26.5) |
(109.7) |
(21.9) |
||
|
Provisions |
(1.7) |
(4.2) |
(3.2) |
||
|
(136.0) |
(195.1) |
(134.5) |
|||
|
Net current assets |
113.1 |
39.8 |
123.5 |
||
|
Non-current liabilities |
|||||
|
Borrowings |
(347.0) |
(246.9) |
(347.0) |
||
|
Deferred income tax liabilities |
(154.0) |
(160.5) |
(164.1) |
||
|
Retirement benefit obligations |
(1.4) |
(1.3) |
(1.4) |
||
|
Deferred revenue |
(364.3) |
(338.4) |
(350.7) |
||
|
Provisions |
(1.2) |
(0.9) |
(1.2) |
||
|
(867.9) |
(748.0) |
(864.4) |
|||
|
Total liabilities |
(1,003.9) |
(943.1) |
(998.9) |
||
|
Net assets |
555.6 |
458.3 |
499.6 |
||
|
EQUITY |
|||||
|
Share capital |
72.2 |
72.2 |
72.2 |
||
|
Share premium |
158.8 |
158.8 |
158.8 |
||
|
Retained earnings |
318.4 |
221.1 |
262.4 |
||
|
Other reserves |
6.2 |
6.2 |
6.2 |
||
|
Total equity |
555.6 |
458.3 |
499.6 |
The interim accounts were approved by the board of directors and authorised for issue on 19 September 2008 and were signed on its behalf by:
P A Jones
Director
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
CONSOLIDATED CASH FLOW STATEMENT
|
6 Months ended 30 June 2008 |
6 Months ended 30 June 2007 |
Year ended 31 December 2007 |
|||
|
Unaudited |
Unaudited |
Audited |
|||
|
£m |
£m |
£m |
|||
|
Net cash from operating activities |
44.8 |
30.3 |
67.0 |
||
|
Investing activities |
|||||
|
Dividends received from joint venture |
0.4 |
0.4 |
0.4 |
||
|
Sale of long-term securities |
- |
- |
100.0 |
||
|
Proceeds from disposal of property, plant and equipment |
0.2 |
0.4 |
0.8 |
||
|
Purchase of property, plant and equipment |
(75.0) |
(57.2) |
(117.9) |
||
|
Purchase of intangible assets |
- |
(1.7) |
(2.0) |
||
|
Receipt of customer contributions |
25.4 |
25.9 |
41.8 |
||
|
Net cash (used in)/generated from investing activities |
(49.0) |
(32.2) |
23.1 |
||
|
Financing activities |
|||||
|
Movement in loan from parent undertaking |
5.6 |
(4.6) |
(3.4) |
||
|
New borrowings raised |
- |
- |
11.0 |
||
|
Repayment of borrowings |
(1.0) |
- |
- |
||
|
Net cash generated from/(used in) financing activities |
4.6 |
(4.6) |
7.6 |
||
|
Net increase/(decrease) in cash and cash equivalents |
0.4 |
(6.5) |
97.7 |
||
|
Cash and cash equivalents at beginning of period |
176.8 |
79.1 |
79.1 |
||
|
Cash and cash equivalents at end of period |
177.2 |
72.6 |
176.8 |
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS
1. REVENUE AND SEGMENTAL ANALYSIS
The Group operates in two principal areas of activity, that of the distribution of electricity and engineering contracting in the United Kingdom.
|
6 months ended 30 June 2008 (Unaudited) |
|||||||
|
Distribution |
Engineering Contracting |
Other |
Total |
||||
|
£m |
£m |
£m |
£m |
||||
|
REVENUE |
|||||||
|
External sales |
107.8 |
25.7 |
4.5 |
138.0 |
|||
|
Inter-segment sales |
0.2 |
- |
(0.2) |
- |
|||
|
Total Revenue |
108.0 |
25.7 |
4.3 |
138.0 |
|||
|
SEGMENT RESULTS |
|||||||
|
Operating profit |
40.2 |
1.4 |
27.0 |
68.6 |
|||
|
Share of profit after tax of joint venture accounted for using the equity method |
0.2 |
||||||
|
Other gains |
0.1 |
||||||
|
Investment income |
5.9 |
||||||
|
Finance costs |
(17.8) |
||||||
|
Profit before tax |
57.0 |
||||||
|
OTHER INFORMATION |
|||||||
|
Capital additions |
64.4 |
- |
(1.9) |
62.5 |
|||
|
Depreciation and amortisation |
20.5 |
- |
(0.4) |
20.1 |
|||
|
Amortisation of deferred revenue |
(5.3) |
- |
- |
(5.3) |
|||
"Other" comprises business support units and consolidation adjustments.
Sales and purchases between the different segments are made at commercial prices.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
1. REVENUE AND SEGMENTAL ANALYSIS (continued)
|
6 months ended 30 June 2007 (Unaudited) |
|||||||
|
Distribution |
Engineering Contracting |
Other |
Total |
||||
|
£m |
£m |
£m |
£m |
||||
|
REVENUE |
|||||||
|
External sales |
101.8 |
25.1 |
4.2 |
131.1 |
|||
|
Inter-segment sales |
0.1 |
- |
(0.1) |
- |
|||
|
Total Revenue |
101.9 |
25.1 |
4.1 |
131.1 |
|||
|
SEGMENT RESULTS |
|||||||
|
Operating profit |
42.0 |
(0.7) |
20.5 |
61.8 |
|||
|
Share of profit after tax of joint venture accounted for using the equity method |
|||||||
|
Other gains |
0.2 |
||||||
|
Investment income |
7.0 |
||||||
|
Finance costs |
(18.4) |
||||||
|
Profit before tax |
50.6 |
||||||
|
OTHER INFORMATION |
|||||||
|
Capital additions |
55.1 |
- |
(1.8) |
53.3 |
|||
|
Depreciation and amortisation |
19.5 |
0.1 |
(0.5) |
19.1 |
|||
|
Amortisation of deferred revenue |
(4.6) |
- |
- |
(4.6) |
|||
"Other" comprises business support units and consolidation adjustments.
Sales and purchases between the different segments are made at commercial prices.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
1. REVENUE AND SEGMENTAL ANALYSIS (continued)
|
Year ended 31 December 2007 (Audited) |
|||||||
|
Distribution |
Engineering Contracting |
Other |
Total |
||||
|
£m |
£m |
£m |
£m |
||||
|
REVENUE |
|||||||
|
External sales |
212.7 |
63.2 |
6.1 |
282.0 |
|||
|
Inter-segment sales |
0.3 |
- |
(0.3) |
- |
|||
|
Total revenue |
213.0 |
63.2 |
5.8 |
282.0 |
|||
|
SEGMENT RESULTS |
|||||||
|
Operating profit |
90.3 |
1.2 |
39.7 |
131.2 |
|||
|
Share of profit after tax of joint venture accounted for using the equity method |
0.4 |
||||||
|
Other losses |
0.2 |
||||||
|
Investment income |
14.9 |
||||||
|
Finance costs |
(37.7) |
||||||
|
Profit before tax |
109.0 |
||||||
|
OTHER INFORMATION |
|||||||
|
Capital additions |
132.0 |
0.1 |
(2.8) |
129.3 |
|||
|
Depreciation and amortisation |
40.3 |
0.1 |
(0.9) |
39.5 |
|||
|
Amortisation of deferred revenue |
(9.5) |
- |
- |
(9.5) |
|||
"Other" comprises business support units and consolidation adjustments.
Sales and purchases between the different segments are made at commercial prices.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
2. INCOME TAX EXPENSE
|
6 months ended 30 June |
6 months ended 30 June |
Year ended 31 December |
|||
|
2008 |
2007 |
2007 |
|||
|
Unaudited |
Unaudited |
Audited |
|||
|
£m |
£m |
£m |
|||
|
Current tax |
11.1 |
11.7 |
24.5 |
||
|
Deferred tax |
5.9 |
4.3 |
9.1 |
||
|
Adjustment in relation to prior years |
(16.0) |
- |
0.7 |
||
|
Impact of rate change |
- |
(10.1) |
(11.3) |
||
|
Total income tax expense |
1.0 |
5.9 |
23.0 |
The underlying tax for the interim period is calculated by applying the effective average tax rate of 29% (2007: 29%) on profit before preference dividends accrued.
Preference dividends are included within finance costs.
The UK Government introduced in the Finance Act 2008 legislation to phase out and withdraw from 2011 capital allowances on qualifying buildings. This will lead to an increase in the deferred tax provision required for accelerated tax depreciation in the region of £7m and will give rise to a one off deferred tax charge for this amount in the year ending 31 December 2008.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS
GROUP
Details of transactions between the Group and other related parties are disclosed below.
Loans
The Group has made loans to companies in the CE Group. The total interest included in investment income in the income statement for the six months ended 30 June 2008 was £5.9m (six month ended 30 June 2007: £4.7m, year ended 31 December 2007: £10.2m). Included within cash and cash equivalents is £176.5m as at 30 June 2008 (30 June 2007: £72.6m, 31 December 2007: £176.8m) in respect of these loans.
The Group has received loans from companies in the CE Group. The total interest included in finance costs in the income statement for the six months ended 30 June 2008 was £4.7m (six months ended 30 June 2007: £5.5m, year ended 31 December 2007: £11.8m). Included within borrowings is £116.4m as at 30 June 2008 (30 June 2007: £109.6m, 31 December 2007: £110.9m) and within trade and other payables £3.3m as at 30 June 2008 (30 June 2007: £3.0m, 31 December 2007: £nil) in respect of these loans.
Interest on loans to/from Group companies is charged at a commercial rate of interest.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
GROUP (CONTINUED)
Trading transactions
During the year, Group entities entered into the following trading transactions with related parties that are not members of the Group:
|
Related Party |
Sales to Related Party |
Purchases from Related Party |
Amounts Owed by Related Party |
Amounts Owed to Related Party |
||||
|
£m |
£m |
£m |
£m |
|||||
|
June 2008: |
||||||||
|
CE Insurance Services Limited |
- |
0.3 |
- |
- |
||||
|
CE UK Gas Holdings Limited |
0.1 |
- |
- |
- |
||||
|
Integrated Utility Services Limited (Registered in Eire) |
- |
0.5 |
- |
- |
||||
|
Vehicle Lease and Service Limited |
0.1 |
2.7 |
- |
- |
||||
|
Yorkshire Electricity Distribution plc |
6.8 |
2.9 |
- |
- |
||||
|
June 2007: |
||||||||
|
CE Insurance Services Limited |
- |
0.3 |
- |
- |
||||
|
CE UK Gas Holdings Limited |
0.1 |
- |
- |
- |
||||
|
Integrated Utility Services Limited (Registered in Eire) |
- |
0.4 |
- |
- |
||||
|
Vehicle Lease and Service Limited |
- |
2.7 |
- |
0.8 |
||||
|
Yorkshire Electricity Distribution plc |
5.6 |
2.4 |
- |
- |
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
GROUP (CONTINUED)
Trading transactions (Continued)
|
Related Party |
Sales to Related Party |
Purchases from Related Party |
Amounts Owed by Related Party |
Amounts Owed to Related Party |
||||
|
£m |
£m |
£m |
£m |
|||||
|
December 2007: |
||||||||
|
CE Insurance Services Limited |
- |
0.6 |
- |
- |
||||
|
CE UK Gas Holdings Limited |
0.2 |
- |
- |
- |
||||
|
Integrated Utility Services Limited (Registered in Eire) |
- |
1.0 |
- |
- |
||||
|
Vehicle Lease and Service Limited |
0.2 |
4.8 |
0.3 |
1.2 |
||||
|
Yorkshire Electricity Distribution plc |
14.0 |
5.9 |
- |
- |
Sales and purchases from related parties were made at commercial prices.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of amounts owed by related parties.
During 2008, 3 directors (30 June 2007: 3, 31 December 2007: 3) and 8 key personnel (30 June 2007: 8, 31 December 2007: 8) utilised the services provided by Northern Transport Finance Limited, a company in the Group.
The amounts included in finance lease receivables owed by these directors and key personnel total £0.1m (30 June 2007: £0.1m, 31 December 2007: £0.1m) in respect of non-current and £0.1m (30 June 2007: £nil, 31 December 2007: £0.1m) in respect of current receivables.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
COMPANY
Details of transactions between the Company and other related parties are disclosed below.
Loans
The Company has made loans to companies in the CE Group. The total interest included in investment income in the income statement for the period ended 30 June 2008 was £4.6m (six months ended 30 June 2007: £3.5m, year ended 31 December 2007: £7.7m). Included within cash and cash equivalents is £70.2m as at 30 June 2008 (30 June 2007: £29.1m, 31 December 2007: 76.1m) in respect of these loans.
The Company has received loans from companies in the CE Group. The total interest included in finance costs in the income statement for the period ended 30 June 2008 was £3.0m (six months ended 30 June 2007: £2.8m, year ended 31 December 2007: £5.7m). Included within borrowings is £16.7m as at 30 June 2008 (30 June 2007: £9.6m, 31 December 2007: £10.9m) in respect of these loans.
Interest on loans to/from Group companies is charged at a commercial rate of interest.
Trading transactions
During the year, the Company entered into the following trading transactions with other members of the CE Group:
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
COMPANY (CONTINUED)
|
Related Party |
Sales to Related Party |
Purchases from Related Party |
Dividends received from Related Party |
||||
|
£m |
£m |
£m |
|||||
|
June 2008: |
|||||||
|
CE UK Gas Holdings Limited |
0.1 |
- |
- |
||||
|
Integrated Utility Services Limited |
0.3 |
- |
- |
||||
|
Northern Electric Distribution Limited |
2.7 |
0.1 |
- |
||||
|
Northern Electric Properties Limited |
0.1 |
0.1 |
- |
||||
|
Yorkshire Electricity Distribution plc |
2.0 |
- |
- |
||||
|
June 2007: |
|||||||
|
CE UK Gas Holdings Limited |
0.1 |
- |
- |
||||
|
Integrated Utility Services Limited |
0.4 |
- |
- |
||||
|
Northern Electric Distribution Limited |
2.7 |
0.1 |
- |
||||
|
Northern Electric Properties Limited |
- |
0.1 |
- |
||||
|
Yorkshire Electricity Distribution plc |
2.0 |
- |
- |
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE 2008
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
COMPANY (CONTINUED)
|
Related Party |
Sales to Related Party |
Purchases from Related Party |
Dividends received from Related Party |
||||
|
£m |
£m |
£m |
|||||
|
December 2007: |
|||||||
|
CE UK Gas Holdings Limited |
0.2 |
- |
- |
||||
|
Integrated Utility Services Limited |
0.7 |
- |
3.6 |
||||
|
Northern Electric Distribution Limited |
6.2 |
0.2 |
20.0 |
||||
|
Northern Electric Properties Limited |
0.1 |
0.2 |
- |
||||
|
Vehicle Lease and Service Limited |
- |
- |
0.4 |
||||
|
Yorkshire Electricity Distribution plc |
4.7 |
- |
- |
Sales and purchases from related parties were made at commercial prices.
There are no amounts outstanding to other members of the CE Group.
Related Shares:
Nthn.elec.prf