TIDM56WD
RNS Number : 8317L
Northern Electric Finance PLC
10 September 2019
NORTHERN ELECTRIC FINANCE plc
HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHSED 30 JUNE
2019
INTERIM MANAGEMENT REPORT
Cautionary Statement
This interim management report has been prepared solely to
provide additional information to shareholders to assess the
business of Northern Electric Finance plc (the "Company") and
should not be relied on by any other party or for any other
purpose.
Business Model
The Company is part of the Northern Powergrid Holdings Company
group of companies (the "Northern Powergrid Group") and is a
subsidiary of Northern Powergrid (Northeast) Limited. The Company's
principal activity during the six months to 30 June 2019 was to act
as the issuer of long-term bonds.
Results for the six months ended 30 June 2019
During the period ended 30 June 2019, the Company made a loss
after tax of GBP0.1 million (period ended 30 June 2018: loss of
GBP0.1 million).
The Company issued a bond of GBP150.0 million in May 2019 and
used this to loan Northern Powergrid (Northeast) Limited GBP150.0
million. The Company met its obligations to make the annual
interest payment on its 2035 debt securities on 4 May 2019. The
annual interest payment on the Company's 2020 debt securities is
due to be paid on 16 October 2019.
Income statement
Investment income and finance costs were in line with the same
period in the prior year.
Cash flow
Cash equivalents as at 30 June 2019 were GBP1.5 million lower
than the position at 31 December 2018 due to interest paid in the
period.
Financial position
The loss after tax at GBP0.1 million was in line with the same
period in the prior year.
Related party transactions
Details of the related party transactions entered into by the
Company and changes therein are included in Note 5 to this
half-yearly financial report.
Dividends
No ordinary dividends were paid in the period such that reserves
were reduced by the loss of GBP0.1 million.
Risks and uncertainties
The principal risks and uncertainties facing the Company are
included in the Company's latest annual reports and accounts for
the year to 31 December 2018, which is available at
www.northernpowergrid.com.
It is anticpated that these risks will continue to be the
principal risks facing the business for the remaining six months of
2019.
Going concern
In the Company's latest annual reports and accounts for the year
to 31 December 2018 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2019, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2018.
Future strategy and objectives
The Company will continue to act as the issuer of long-term debt
securities.
Responsibility Statement
The directors confirm that to the best of their knowledge:
(a) the condensed set of finanical statements, which has been
prepared in accordance with IAS 34, gives a true and fair view of
the assets, liabilities, financial position and profit of the
Company as required by Disclosure and Transparency Rules ("DTR")
4.2.4R for the six months to 30 June 2019; and
(b) the interim management report contains a fair review of the
information required by DTR 4.2.7R.
By order of the board
P A Jones
Director
5 September 2019
CONDENSED STATEMENT OF PROFIT OR LOSS -- SIX MONTHSED TO 30 JUNE
2019
Six months Six months
ended 30 June ended 30
2019 June 2018
(unaudited) (unaudited)
GBPm GBPm
CONTINUING OPERATIONS
Finance income 8.9 8.5
Finance costs (9.0) (8.6)
--------------- ------------
LOSS BEFORE INCOME TAX (0.1) (0.1)
Income tax - -
--------------- ------------
LOSS FOR THE PERIOD (0.1) (0.1)
--------------- ------------
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE PERIODED 30 JUNE 2019
There is no other comprehensive income for the Company for the
six months to 30 June 2019 or the comparative six month period in
2018 other than the losses reported above.
CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
30 June 31 December
2019 2018
(unaudited)
GBPm GBPm
ASSETS
NON-CURRENT ASSETS
Trade and other receivables 395.6 248.1
------------ ------------
CURRENT ASSETS
Trade and other receivables 9.6 3.5
Cash and cash equivalents - 1.5
------------ ------------
9.6 5.0
------------ ------------
TOTAL ASSETS 405.2 253.1
------------ ------------
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 0.1 0.1
Retained earnings (1.7) (1.6)
TOTAL EQUITY (1.6) (1.5)
------------ ------------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 395.3 247.8
Deferred tax 0.1 0.1
395.4 247.9
------------ ------------
CURRENT LIABILITIES
Borrowings 11.1 6.7
Trade Payable 0.3 -
------------ ------------
11.4 6.7
------------ ------------
TOTAL LIABILITIES 406.8 254.6
TOTAL EQUITY AND LIABILITIES 405.2 253.1
------------ ------------
The half-yearly financial statements were approved by the board
of directors and authorised for issue on 5 September 2019 and were
signed on its behalf by:
P A Jones
Director
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PERIODED 30
JUNE 2019
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2019 0.1 (1.6) (1.5)
Comprehensive income for
the period (unaudited) - (0.1) (0.1)
Balance at 30 June 2019
(unaudited) 0.1 (1.7) (1.6)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2018 0.1 (1.5) (1.4)
Comprehensive income for
the period (unaudited) - (0.1) (0.1)
Balance at 30 June 2018
(unaudited) 0.1 (1.6) (1.5)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2018 0.1 (1.5) (1.4)
Comprehensive income for
the period - (0.1) (0.1)
Balance at 31 December
2018 0.1 (1.6) (1.5)
-------- --------- -------
CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIODED 30 JUNE
2019
6 Months 6 Months
ended 30 ended 30
June 2019 June 2018
(unaudited) (unaudited)
GBPm GBPm
Profit before income tax (0.1) (0.1)
Finance costs 9.0 8.6
Finance income (8.9) (8.5)
------------ ------------
Cash generated from operations - -
------------ ------------
Net interest paid (5.1) (5.1)
------------ ------------
Net cash used in operating activities (5.1) (5.1)
------------ ------------
Investing activities
Loan to related party (147.4) -
------------ ------------
Net cash used in investing activities (147.4) -
------------ ------------
Financing activities
Issue of long-term debt 147.4 -
Movement in loan from group undertakings 3.6 3.6
------------ ------------
Net cash generated from financing activities 151.0 3.6
------------ ------------
Net decrease in cash equivalents (1.5) (1.5)
Cash and cash equivalents at beginning of
period 1.5 1.5
------------ ------------
Cash and cash equivalents at end of period - -
------------ ------------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The information included within these condensed financial
statements that refer to the year ended 31 December 2018 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor
reported on those accounts and that report was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
2. ACCOUNTING POLICIES
Basis of preparation
The annual financial statements of the Company are prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European
Union.
Going concern
In the Company's latest annual report and accounts for the year
to 31 December 2018 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2019, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2018.
Changes in accounting policy
The Company's accounting policies and methods of computation are
the same as the accounting policies which are described in the
Company's financial statements for the year ended 31 December
2018.
Application of new and revised IFRS
In the current year, the company has a number of amendments to
IFRS by the International Accounting standards Board ("IASB) that
are mandatorily effective for an accounting period that begins on
or after 1 January 2019:
IFRS 16- Leases IFRS 16 supersedes the current lease
guidance including IAS 17 Leases and
the related interpretations. IFRS 16
distinguishes between leases and service
contracts on the basis of whether an
identified asset is controlled by a
customer. Distinctions between operating
leases and finance leases are removed
for lessee accounting, and is replaced
by a model where right-of-use asset
and a corresponding liability have
to be recognised for all leases by
lessees except for short term leases
and leases of low-value assets. As
of 30 June 2019, the Group has no non-cancellable
operating lease commitments. As such
the application of IFRS 16 has not
had material impact on the financial
statements.
None of the other standards, interpretations and amendments
which are effective for periods beginning 1 January 2019 has had a
material effect on the financial statements:
-- Amendments to IAS 28 - Long-term interests in associates and
joint ventures;
-- Amendments to IAS 19 - Plan amendment, curtailment or
settlement; and
-- Annual improvements to IFRS 2015-2017 cycle.
3. INCOME TAX EXPENSE
Tax for the six month period to 30 June 2019 is charged at
19.00% (six months ended 30 June 2018: 19.00%), which represents
the best estimate of the average annual effective tax rate expected
for the full year, as applied to the pre-tax income of the six
month period.
The Finance No2 Act 2015 reduced the rate of corporation tax to
19% effective from 1 April 2018 and to 17% effective from 1 April
2020. The Finance Act 2016, which was substantively enacted on 6
September, 2016 further reduced the rate of corporation tax
effective from 1 April 2020 to 17%. Accordingly deferred tax assets
and liabilities have been calculated at the tax rates which will be
in force when the underlying temporary differences are expected to
reverse.
4. FINANCIAL INSTRUMENTS
Except as detailed in the following table, the directors
consider that the carrying value amounts of financial assets and
financial liabilities recorded at amortised cost are approximately
equal to their fair values:
Carrying Value Fair Value
30 June 31 December 30 June 31 December
2019 2018 2019 2018
(unaudited) (unaudited)
GBPm GBPm GBPm GBPm
Financial assets
Amounts owed by group
undertakings 405.2 251.6 416.2 311.5
============ ============ ============ ============
Financial liabilities
Intercompany short-term
loan 3.3 - 3.3 -
2020 - 8.875% bonds 106.0 101.5 115.8 114.4
2035 - 5.125% bonds 149.3 153.0 205.9 197.1
2049 - 2.750% bonds 147.8 - 156.2 -
------------ ------------ ------------ ------------
406.4 254.5 481.2 311.5
============ ============ ============ ============
5.
5. RELATED PARTY TRANSACTIONS
Transactions entered into with related parties and balances
outstanding were as follows:
Interest Borrowings
received owed (to)/from
from related related
parties parties
GBPm GBPm
Related party
Six months ended 30 June 2019 (unaudited):
Northern Powergrid (Northeast) Limited 8.9 405.2
Yorkshire Electricity Group plc - (3.3)
-------------- ----------------
8.9 408.5
============== ================
Six months ended 30 June 2018 (unaudited):
Northern Powergrid (Northeast) Limited 8.5 257.4
Yorkshire Electricity Group plc - (3.6)
-------------- ----------------
8.5 253.8
============== ================
Year ended 31 December 2018:
Northern Powergrid (Northeast) Limited 17.0 251.6
Yorkshire Electricity Group plc - 1.5
-------------- ----------------
17.0 253.1
============== ================
Interest on loans to/from companies within the Northern
Powergrid Group is charged at a commercial rate of interest.
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London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BGGDCXGBBGCG
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