RNS Number:4502T
Mid Kent Water PLC
19 December 2003
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2003
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2003
CHAIRMAN'S STATEMENT
The last year has seen many changes in the Board of our Company. However, with
my appointment as Chairman in July and subsequent appointments of Jo Stimpson,
Finance Director and Paul Seeley, Asset Director I am certain we now have a team
in place capable of taking the business forward.
That is not to say that the performance has been anything other than very good
throughout the period. The financial performance is strong and service to
customers exceeds last year for all measures.
The summer represented a significant challenge both to Mid Kent Water and its
neighbouring water companies. The result was excellent with very few
interruptions to supply whilst temperature and water demand were at record
levels. This performance on customer service was achieved only by the commitment
and efforts of our staff and I take this opportunity to thank them for their
hard work and dedication.
Financial Performance
Turnover in the half year to 30 September 2003 was #21.0m compared with #20.2m
for the same period last year, an increase of 4%. Water income rose by 3.2% to
#19.0m, which includes the price increase of 2.65% allowed by OFWAT.
Operating profit, before refinancing and restructuring work was #7.1m for this
and the same period last year.
Net interest payable has increased from #2.6m to #3.2m, reflecting the increased
borrowings as a result of refinancing.
There have been a number of significant disposals of surplus property and land,
which have resulted in profits of #1.6m.
As a result of the above factors, profit before tax in the half year to 30
September 2003 was #5.4m compared with #4.6m for the same period last year.
Price Review 2004
The company submitted its draft business plan to OFWAT in August and is now in
dialogue with all regulators and stakeholders, prior to submission of the final
version in April next year. The plan sets out our views on future water resource
requirements, including the impact of new housing in Ashford, future levels of
customer service, our ability to achieve efficiencies and future levels of
customer water bills. WaterVoice have commended the public version of our plan
on its clarity and we have had encouraging response from other stakeholders.
Capital Expenditure
Cash payments for capital expenditure in the period amounted to #10.1m, compared
to #13.9m for the same period last year. This year's programme so far has a
lower spend than that of the first half of last year, when the new treatment
plant programme was being completed, although expenditure is planned to increase
for the latter half of the year.
We continue to drive forward the quality programme and the section 19
undertaking and are reviewing strategic options to ensure we meet customer
demand next summer.
Water Quality
The quality of water at our customers' taps continues to improve, with reported
compliance for 2002 being 99.89% compared with 99.84% for the previous year.
Non Regulated Activity
We have continued to develop our Commercial Activities focussing on water
engineering and contracting services. The Commercial Activity continues to build
on core expertise and brand values.
Gordon Maxwell
Chairman
18 December 2003
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2003
PROFIT AND LOSS ACCOUNT
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
Notes (unaudited) (unaudited)
#000 #000 #000
4 Turnover 20,954 20,150 41,116
Operating costs (13,882) (14,363) (29,622)
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5 Operating profit 7,072 5,787 11,494
Profit on sale of fixed 1,642 1,409 1,931
assets
Profit on ordinary 8,714 7,196 13,425
activities before
interest
Interest receivable 1,467 46 863
Interest payable and (4,745) (2,675) (6,800)
similar charges
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Profit on ordinary 5,436 4,567 7,488
activities before
taxation
3 Tax on profit on ordinary (589) (1,627) (2,764)
activities
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Profit on ordinary 4,847 2,940 4,724
activities after
taxation
Proposed dividends (3,701) - (29,892)
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Retained profit/(loss) for 1,146 2,940 (25,168)
the period
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Earnings per ordinary 26.0p 15.8p 25.3p
share - basic
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Dividends per ordinary 19.85p 0.00p 160.31p
share
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INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2003
SUMMARISED BALANCE SHEET
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited)
#000 #000 #000
Fixed assets
Tangible assets 165,718 158,522 161,763
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Current assets
Stocks 249 730 681
Debtors - amounts falling 17,686 8,071 11,157
due within one year
Debtors - amounts falling
due after more than one
year
Investments 35,000 - 35,000
Cash at bank and in hand 12,526 - 14,928
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1,205 806 1,572
66,666 9,607 63,338
Creditors: amounts falling (37,253) (27,396) (35,752)
due within one year
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Net current liabilities 29,413 (17,789) 27,586
-------------------------------------------------------------------------
Total assets less current 195,131 140,733 189,349
liabilities
Creditors: amounts falling
due after more than one
year
Provision for deferred (149,028) (64,157) (144,059)
taxation
(10,493) (14,004) (10,826)
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Net assets 35,610 62,572 34,464
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Capital and reserves
Attributable to equity
interests
Called up share capital 18,646 18,646 18,646
Profit and loss account 16,964 43,926 15,818
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Equity shareholders' 35,610 62,572 34,464
funds
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INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2003
SUMMARISED CASH FLOW STATEMENT
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited)
#000 #000 #000
Net cash inflow from 8,100 7,140 15,034
operating activities
Returns on investments and (2,355) (2,476) (7,590)
servicing of finance
Taxation - (884) (840)
Capital expenditure (6,372) (9,754) (16,253)
Equity dividends paid (3,142) (2,640) (29,388)
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Cash outflow before
management of liquid
resources and financing (3,769) (8,614) (39,037)
Management of liquid 2,402 - (14,928)
resources
Financing 1,000 8,050 54,167
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(Decrease)/increase in (367) (564) 202
cash
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Notes 6 to 9 are part of this statement.
Notes
1 The figures for the year ended 31 March 2003 do not constitute the
Company's statutory accounts for that period but have been extracted from
the statutory accounts, which have been filed with the Registrar of
Companies. The auditors have reported on those accounts and that report
was unqualified and did not contain a statement under Section 237 (2) of
the Companies. The accounts for the six months ended 30 September 2003
have not been audited, nor have the accounts for the equivalent period in
2002. They comply with relevant accounting standards and have been
prepared on a consistent basis using accounting policies set out in the
2003 Annual Report.
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2 All recognised gains and losses are included in the profit and loss
account for the period.
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3 The tax charge for the period ended 30 September 2003 has been based on
the estimated effective rate for the full year. The effective tax rate for
the period ended 30 September 2003 is lower than the equivalent period in
2002 due to changes in the underlying gilt rate and its effect on the
deferred tax discount.
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Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited)
#000 #000 #000
4 Analysis of turnover
Unmeasured supplies 10,607 10,636 21,144
Measured supplies 8,359 7,735 15,595
Other activities 1,988 1,779 4,377
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20,954 20,150 41,116
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5 Operating profit
-------------------------------------------------------------------------
Operating profit is stated
after charging
Refinancing costs 24 - 751
Restructuring costs - 1,307 1,536
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6 Reconciliation of operating profit to operating cash flow
Operating profit 7,072 5,787 11,494
Depreciation charge 4,321 3,403 7,866
Decrease/(increase) in 432 (163) (114)
stocks
Increase in debtors (3,510) (487) (2,933)
(Decrease)/increase in (215) (1400) (1,279)
creditors
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8,100 7,140 15,034
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7 Analysis of cash flows
Returns on investment and
servicing of finance
Interest received 857 46 223
Interest paid (3,212) (2,522) (5,355)
Issue costs - - (2,450)
Interest element of
finance lease rental
payments - - (8)
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(2,355) (2,476) (7,590)
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Notes (continued)
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited)
#000 #000 #000
7 Analysis of cash flows
(continued)
Capital expenditure
Purchase of tangible fixed (10,069) (13,906) (22,016)
assets
Contributions to 2,042 2,332 3,120
infrastructure assets
Sale of tangible fixed 1,655 1,820 2,643
assets
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(6,372) (9,754) (16,253)
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Management of liquid
resources
Cash deposits 2,402 - (14,928)
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Financing
Capital element of finance - - (53)
lease rental payments
Loans from other group 1,000 8,050 (45,780)
undertakings
Loan to parent undertaking - - (35,000)
Index linked loan - - 135,000
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1,000 8,050 54,167
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At
At 30 September
2003
1 April Cash Non-cash #000
changes
2003 Flow #000
#000 #000
8 Analysis of net debt
Cash at bank and in hand 1,572 (367) - 1,205
Short term deposits 14,928 (2,402) - 12,526
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16,500 (2,769) - 13,731
Loans from other group (5,820) (1,000) - (6,820)
undertakings
Loan to parent 35,000 - - 35,000
undertaking
Index linked loan (136,203) - (1,544) (137,747)
Issue costs 2,425 - (42) 2,383
Debenture stock (4,461) - - (4,461)
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(92,559) (3,769) (1,586) (97,914)
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Notes (continued)
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited)
#000 #000 #000
9 Reconciliation of net cash flow to movement in net debt
Decrease in cash in the (367) (564) 202
period
Cash inflow from increase
in debt and lease
financing (net of issue
costs paid)
Cash (inflow)/outflow from (1,000) (8,050) (51,717)
movement in liquid
resources (2,402) - 14,928
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Movement in net debt (3,769) (8,614) (36,587)
resulting from cash
flows
Loan indexation (1,544) - (1,203)
Amortisation of issue (42) - (25)
costs
Net debt at start of (92,559) (54,744) (54,744)
period
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Net debt at end of (97,914) (63,358) (92,559)
period
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END
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