Treasury and Resources
Ministerial Decision Report
JERSEY ELECTRICITY PLC 2012 ANNUAL GENERAL MEETING VOTING INSTRUCTIONS
- Purpose of Report
To consider the resolutions put forward for Jersey Electricity plc (JEC) Annual General Meeting (AGM) on Tuesday 6 March 2012.
- Background
The States of Jersey is the holder of all the Ordinary 5p shares of the JEC which represents 86.4% of the total voting rights. The directors of the company have proposed 5 ordinary resolutions to be considered at the AGM, these are outlined below and in the Notice of Annual General Meeting (Appendix B) and Form of Proxy (Appendix C). The AGM will be held on Tuesday 6 March 2012.
- Resolutions
The following resolutions have been put forward for consideration at the AGM.
3.1 Ordinary Resolution 1 -To receive the Directors’ Report, the Annual Accounts and Auditors’ Report of the Jersey Electricity Plc (JEC) for 2011
The company’s Annual Report and Accounts contains the full Directors’ Report, Accounts and Auditors Report. The following paragraphs summarise the key financial matters.
Group revenue for the year to 30 September 2011 was £100.49m, 2% higher than the previous year. The Energy business contributed £74.5m of this turnover, unchanged from last year, whilst unit sales volumes were 1% higher, the revenues remained the same due to a 5% price decrease given to customers with effect from January 2010.
Turnover in other business segments is summarised below:
- Retail £16.5m – increase of 14%, lower sales in traditional white/brown goods offerings were more than compensated by gains in computer retailing, toy/hobbies and e-retailing internet businesses within their Retail portfolio.
- Property (excluding internal revenues) £2.2m – decrease of 15% on the previous year, due to the 2010 results including backdated profit from the resolution of an outstanding rent review.
- Building Services £4.7m – increase of 10% on the previous year.
- Other businesses £2.6m - decrease of 16% being attributable to largely non-recurring revenues received in the prior year from JEC’s ex-associate, Newtel.
The cost of sales rose by £0.9m to £70.0m associated with the rise in revenues in JEC’s non-Energy business units. Operating expenses at £19.6m were £1.6m higher than in 2010 due to a mix of increased maintenance and repair costs, depreciation, salaries, advertising and bad debt provisions.
Profit before tax, for the year to 30 September 2011 declined from £14.6m to £11.07m. This reduction was mostly due to the 2010 one off revaluation of JEC’s investment property portfolio (£2.5m) and the one off £0.8m distribution of proceeds from JEC’s ex- associate, Newtel, for the sale of assets.
During 2011 JEC received £0.2m in proceeds from the sale of their remaining shares/loans in Newtel.
Interest received on deposits of £0.3m remained in line with 2010.
The taxation charge for the year rose £0.2m to £2.4m. Whilst the 2010 profits were higher, much of the year on year difference was due to non-taxable items such as the upside from the revaluation of investment properties.
Group earnings per share fell 30% to 28.05p compared with 40.20p in 2010 due to a sizeable element of 2010 earnings relating to non-recurring windfall revenues and a material upside from the revaluation of the investment property portfolio. (Note: Earnings Per share values have been restated to reflect the 20 for 1 share split approved at the AGM in March 2011)
The opinion provided in the Auditors’ Report, signed by Deloitte LLP, is that:
- In our opinion the financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs as at 30 September 2011 and of the Group’s profit for the year then ended;
- the financial statements have been properly prepared in accordance with IFRs as adopted by the European Union; and
- the financial statements have been properly prepared in accordance with the Companies (Jersey) Law 1991.
Appendix A provides a summary of the key performance figures.
3.2 Ordinary Resolution 2 - To Declare Dividends
86.4% of the total voting rights are owned by the States of Jersey with the remaining 13.6% held by other shareholders via a full listing on the London Stock Exchange. Of the other listed shareholders there is one large institution, Utilico Limited, which represents 4.5% of the total voting rights.
The proposed final dividend for this year is 6.50p per share, net of tax, a 4.8% rise from 6.2p on the previous year. During the year an interim dividend of 4.25p per share, net of tax, was paid (2010 4.05p).
In 2011 a special one-off dividend of 3.25p per share was received for the proceeds distributed from JEC’s associate – Newtel, for the sale of assets.
2010 Dividend numbers have been restated due to the 20 for 1 share split which was approved at the AGM in March 2011.
3.3 Ordinary Resolutions 3 and 4 - To Re-elect Directors of the Company
In accordance with Article 127 of the Company’s articles, the following Directors are seeking re-election to the board of directors:-
Re-elect Geoffrey Grime as a Director of the Company
Geoffrey joined the board in 2003. He retired in 1999 as Chairman of Abacus Financial Services, a leading offshore trust company in which he played an instrumental role as one of its founders.
A Chartered Accountant, his career in Jersey commenced in 1969 with Cooper Brothers & Co. and progressed to his appointment as Channel Islands Senior Partner of Coopers & Lybrand in 1990. He is currently the Chairman of EFG Offshore Limited and also holds many professional appointments as both director and trustee. In November 2002 he was elected as a Deputy in the States of Jersey and he retired from that position in December 2005.
Re-elect John Stares as a Director of the Company
John joined the Board in 2009. He is the Managing Director of Guernsey Enterprise Agency and a non-Executive Director/Advisor to three other Channel Island headquartered groups of companies. He is a Fellow of the Institute of Chartered Accountants of England and Wales, and a Member of the Worshipful Company of Management Consultants. Prior to moving to Guernsey in 2001, John was with Accenture for 23 years. During that period, he worked as a strategic, financial, change and IT consultant with major clients in most industry sectors and held a variety of leadership roles in Accenture’s Canadian, European & Global consulting businesses.
3.4 Ordinary Resolution 5 - To re-appoint the Auditors and authorise the Directors to agree their remuneration
In accordance with Article 178, It is proposed to re-appoint Deloitte LLP as the auditors until the next Annual General Meeting.
For the year to 30 September 2011 the Auditors were remunerated £70,000 for audit services.
- Recommendation
The Treasurer of the States and Greffier of the States is recommended to vote, by proxy, in favour of the resolutions to be put before the Annual General Meeting of The Jersey Electricity Plc on the 6th March 2012.
- Reason for Decision
To fulfil the States’ role as shareholder of the Jersey Electricity Plc by exercising voting rights at the Annual General Meeting.
- Resource Implications
The financial implications are as detailed in the report.
Report author : Head of Shareholder Relations | Document date : 14 February 2012 |
Quality Assurance / Review : | File name and path: |
MD sponsor : Treasurer of the States |
Appendix A – Summary of Key Performance Indicators
Appendix B – Notice of Annual General Meeting
Appendix C – Proxy form for JEC Annual General Meeting
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