Jersey Electricity (JEL)

Business description

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.

Y/E Sep Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2015A 100.5 23.8 12.4 32.5 13.9 5.6
2016A 103.4 24.6 13.2 32.4 14.0 5.2
2017E 104.5 25.7 13.4 34.3 13.2 5.4
2018E 106.8 26.4 13.8 35.2 12.9 5.1

Last updated on 23/10/2017

Latest research

Investment summary

JEL delivers attractive and stable returns to its shareholders and secure, affordable, low-carbon energy to its customers. In H117, JEL kept prices to customers flat while increasing the interim DPS by 5.5%, to 5.8p. Due to investment in interconnectors, JEL was also able to import 93% of its electricity from low-carbon sources in France. At a divisional level the core energy business performed strongly, with operating profits +11.1% to £7.7m, helped by increased unit sales and reduced electricity purchase costs, which more than offset higher depreciation and pension charges. Net debt remained broadly stable at £29.4m and the balance sheet remains prudently managed. We believe that JEL is on track to meet our FY17 forecasts and, at current levels, continues to trade at a discount to our sum-of-the-parts valuation of 520p/share.

Last updated on 02/11/2017

Industry outlook

We expect the current regulatory regime to continue, enabling JEL to earn a return of 6-7% on the asset base of the electricity business.

Last updated on 02/11/2017

Key management

Martin Magee, CFO

Company address

The Powerhouse
PO Box 45, Queen's Road
St Helier
United Kingdom
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