Jersey Electricity

LN: JEL

£89.3m market cap

470p last close

Jersey Electricity is the monopoly supplier of electricity to the island of Jersey. It also operates businesses in retail, property and business services on the island.

Investment summary

JEL reported a very strong financial performance in FY18, with record revenues and profits. Revenue rose 4%, to £105.9m, whereas profits increased 13.3% to £15.3m. Net debt fell £7.7m to £14.3m and DPS increased 5% to 14.9p for the year (in line with our forecasts). The DPS was covered 2.7x times by earnings. The core energy business in particular had a strong year in FY18, with operating profits +14.5% (+£1.8m) to £13.4m. For the first time in recent years JEL benefitted from an increase in unit sales (+2.1% to 634m kWh, thanks to cold weather and customer switching) and a tariff increase (2% implemented in June). Ninety five per cent of electricity was imported from low carbon sources in France (nuclear and renewables), which helped minimise the use of more expensive and polluting on-island generation. Our forecasts remain under review.

Y/E Sep
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 102.1 25.4 13.5 34.6 13.6 5.0
2018A 105.9 27.9 15.7 40.7 11.5 4.8
2019E N/A N/A N/A N/A N/A N/A
2020E N/A N/A N/A N/A N/A N/A
Last updated on 21/02/2019
Industry outlook

Supplying secure, affordable and sustainable electricity, JEL is well positioned to withstand any changes to its regulatory regime.

Last updated on 21/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 16.9
Forecast gearing ratio (%) 10
Price performance
%
1m
3m
12m
Actual (2.1) 0.6 (6.0)
Relative* (4.7) (1.3) (4.2)
52-week high/low 496.5p/451.0p
*% relative to local index
Key management
Martin Magee CFO