Jersey Electricity — H1 strong both financially and operationally

Jersey Electricity (LSE: JEL)

Last close As at 16/06/2025

GBP4.65

0.00 (0.00%)

Market capitalisation

GBP55m

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Research: Industrials

Jersey Electricity — H1 strong both financially and operationally

Jersey Electricity (JEL) recently released its H125 results, reporting group revenue growth of 9% y-o-y to £82.3m (H124: £75.6m), mainly due to the performance of its energy business. PBT remained relatively flat year-on-year at £10.5m, while cost of sales and operating costs increased 12% y-o-y, reflecting continuing inflationary pressures. Net cash on the balance sheet contracted to £8.5m from £16.7m last year, driven by a rise in capital expenditure as part of JEL’s £180m five-year strategic investment plan to improve its energy network and services. We maintain our previous estimates and valuation of 708p per share.

Written by

Andrew Keen

Managing director, head of content, energy and resources, industrials

Utilities

H125 results

17 June 2025

Price 465.00p
Market cap £54m

Net cash/(debt) at H125

£8.5m

Shares in issue

11.6m
Free float 38.0%
Code JEL
Primary exchange LSE
Secondary exchange N/A
Price Performance

Business description

Jersey Electricity is a vertically integrated power utility dealing in the importation, generation, transmission and distribution of electricity to Jersey. It also operates businesses in retail, property and business services on the island.

Analysts

Andrew Keen
+44 (0)20 3077 5700
Harry Kilby
+44 (0)20 3077 5700

Jersey Electricity is a research client of Edison Investment Research Limited

Note: EBIT is normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. EPS is reported. FY23 revenue and EBIT include rebate of £3.6m.

Year end Revenue (£m) EBIT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
9/23 128.7 15.7 36.81 19.40 12.6 4.2
9/24 135.7 15.3 37.92 20.40 12.3 4.4
9/25e 144.8 12.5 27.62 21.45 16.8 4.6
9/26e 148.7 16.6 38.02 22.62 12.2 4.9

JEL’s energy business saw unit sales grow 2.7% y-o-y to 365.5m (up from 355.9m at H124), driven by a colder-than-average winter period. The combination of increased unit sales and the 7.5% tariff rise implemented in January 2025 saw energy revenue increase c 12% y-o-y to £68.2m. Operating profit rose c 20% y-o-y to £10.3m, predominantly due to increased operating efficiencies across the business. Management reaffirmed guidance and anticipates its return on regulated energy assets (measured on a five-year rolling basis) year-end position to be in line with its target range of 6–7% (6.3% at end FY24 on a five-year basis).

Net cash decreased year-on-year to £8.5m (down from £16.7m) due to JEL’s £180m five-year strategic investment plan aimed at improving its energy network and services (see our April 2025 outlook note). This is split between preparing the network for net zero (a £120m plan known as The Big Upgrade), £30m allocated to enhancing supply resilience and the balance focused on decarbonisation (JEL successfully commissioned an inaugural ground mounted solar array in H1). JEL’s board proposed an interim dividend of 8.82p (up from 8.40p), taking its final dividend for 2024 to 12.0p, a 5% increase year-on-year. The company reiterated that its dividend policy will aim to achieve sustained real growth over the medium term.

JEL’s electricity prices remain fixed for the remainder of 2025 and the company commented that it does not anticipate price increases for the rest of the year. In addition, JEL’s energy costs are materially hedged through to the end of 2027, which should enable financial resilience and stability for its customers. The company looks set to have a strong FY25, although its H1 results should not necessarily be extrapolated to H2, in our view, as although fully hedged, general inflation and the underlying prices at which power purchases were hedged may be different in H2. We leave our FY25 estimates and valuation (based on a discounted cash flow/sum-of-the-parts blend) of 708p per share unchanged.

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