RNS Number:0837G
Mid Kent Water PLC
07 December 2004
MID KENT WATER
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2004
CHAIRMAN'S STATEMENT
The last six months has represented a period of sustained effort for the Mid
Kent Water team as we have completed the negotiations with OFWAT and other
stakeholders for the regulatory price review whilst also ensuring the Company
continues to deliver high levels of service to its customers. The Company's
recently announced Overall Performance Assessment for the last financial year,
as adjudged by OFWAT, showed once again an improvement on the previous year
with, in particular, the highest levels of water quality and the lowest levels
of supply interruptions in the Company's history.
The company continues to work closely with its parent group, swan, and its
ultimate controlling party, WestLB. In the Summer swan sold two group companies
- Inenco and Eclipse Scientific - and the Company took this opportunity to
insource that part of Eclipse Scientific's laboratory operations that served Mid
Kent Water. The integration has been smooth and we believe this will further
strengthen the Company's operating capability for the future.
The Company's financial performance in the last 6 months has been strong with
operating profit very similar to the same period last year.
The Company's continued excellent performance, both in the arena of customer
service and in financial measures, would not be possible without the commitment
and efforts of all our staff and I would like to take this opportunity to thank
them for their hard work and dedication.
Financial Performance
Turnover in the half year to 30 September 2004 was #21.3m compared with #21.0m
for the same period last year, an increase of just under 2%. Water income rose
by 1.8% to #19.3m, which includes the price increase of 2.53% allowed by OFWAT.
Operating profit was #7.0m for the period, in line with the result to 30
September 2003.
Net interest payable has reduced marginally from #3.3m to #3.2m as the Company
benefited from increased interest rates on its investments.
There have been no significant disposals of surplus property and land during the
period (total profit on the disposal of fixed assets was #46k) compared to the
period to 30 September 2003 of #1.6m.
As a result of the above factors, profit before tax in the half year to 30
September 2004 was #3.9m compared with #5.4m for the same period last year.
Price Review 2004
The Company received its Final Determination for the Price Review 2004 on 2
December. The Company is reviewing the Determination in depth and feel it is too
early to comment in detail on its contents. However, the Company is pleased to
see the positive changes that OFWAT have made between the Draft and the Final
Determinations which are the result of significant and informed debate over the
intervening months.
Capital Expenditure
Cash payments for capital expenditure in the period amounted to #12.8m, compared
to #10.1m for the same period last year.
The largest project so far this year is the building of a new reservoir at our
Ford Pumping station which will improve the operational service and the security
of supply in the Herne Bay and Whitstable areas. It is expected that the
reservoir will be put into service later this month.
Water Quality
Mid Kent Water continues to regard the quality of water at our customers' taps
as of utmost importance and we are pleased to have reported compliance in 2003
at 99.88%, ahead of the Industry average, and the highest ever level achieved by
the Company.
Non Regulated Activity
We have continued to develop our Commercial Activities focussing on services
that build on core expertise and brand values.
Gordon Maxwell
Chairman
6 December 2004
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2004
PROFIT AND LOSS ACCOUNT
Notes Half year Half year Year
ended ended ended
30 30 31 March
September September
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
4 Turnover 21,343 20,954 43,039
Operating costs (14,297) (13,882) (28,837)
5 Operating profit 7,046 7,072 14,202
Profit on sale of fixed assets 46 1,642 1,656
-------------------------- ------------ ----------- -----------
Profit on ordinary activities before 7,092 8,714 15,858
interest
Interest receivable 1,626 1,467 2,976
Interest payable and similar (4,806) (4,745) (10,218)
charges ------------ ----------- -----------
--------------------------
3 Profit on ordinary activities before 3,912 5,436 8,616
taxation
Tax on profit on ordinary (1,104) (589) (716)
activities ------------ ----------- -----------
--------------------------
Profit on ordinary activities after 2,808 4,847 7,900
taxation
Proposed dividends (1,800) (3,701) (4,973)
-------------------------- ------------ ----------- -----------
Retained profit for the period 1,008 1,146 2,927
-------------------------- ------------ ----------- -----------
Earnings per ordinary share - 15.1p 26.0p 42.4p
basic ------------ ----------- -----------
--------------------------
Dividends per ordinary share 9.65p 19.85p 26.67p
-------------------------- ------------ ----------- -----------
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2004
SUMMARISED BALANCE SHEET
Half year Half year Year
ended ended ended
30 30 31 March
September September
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
Fixed assets 180,170 165,718 173,986
Tangible assets
-------------------------- ------------ ----------- -----------
Current assets 830 249 722
Stocks 8,918 17,686 8,043
Debtors - amounts falling due within 35,000 35,000 35,000
one year
Debtors - amounts falling due after 8,800 12,526 10,060
more than one year
Investments 4,121 1,205 1,130
Cash at bank and in hand
-------------------------- ------------ ----------- -----------
57,669 66,666 54,955
Creditors: amounts falling due within (48,929) (37,253) (43,635)
one year ------------ ----------- -----------
--------------------------
Net current assets 8,740 29,413 11,320
-------------------------- ------------ ----------- -----------
Total assets less current 188,910 195,131 185,306
liabilities
Creditors: amounts falling due after (141,037) (149,028) (138,105)
more than one year
Provision for deferred taxation (9,474) (10,493) (9,810)
-------------------------- ------------ ----------- -----------
Net assets 38,399 35,610 37,391
-------------------------- ------------ ----------- -----------
Capital and reserves 18,646 18,646 18,646
Attributable to equity interests 19,753 16,964 18,745
Called up share capital
Profit and loss account
-------------------------- ------------ ----------- -----------
Equity shareholders' funds 38,399 35,610 37,391
-------------------------- ------------ ----------- -----------
INTERIM STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2004
SUMMARISED CASH FLOW STATEMENT
Half year Half year Year
ended ended ended
30 30 31 March
September September
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
Net cash inflow from operating 4,859 8,100 21,501
activities
Returns on investments and servicing (102) (2,355) (4,550)
of finance
Taxation 6 - (411)
Capital expenditure (10,833) (6,372) (20,259)
Equity dividends paid (2,629) (3,142) (6,841)
-------------------------- ------------ ----------- -----------
Cash outflow before management of (8,699) (3,769) (10,560)
liquid resources and financing
Management of liquid resources 1,260 2,402 4,868
Financing 10,430 1,000 5,250
-------------------------- ------------ ----------- -----------
Increase/(decrease) in cash 2,991 (367) (442)
-------------------------- ------------ ----------- -----------
Notes 6 and 9 are part of this statement.
Notes
1 The figures for the year ended 31 March 2004 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 Act.
The accounts for the six months ended 30 September 2004 have not been
audited, nor have the accounts for the equivalent period in 2003. They
comply with relevant accounting standards and have been prepared on a
consistent basis using accounting policies set out in the 2004 Annual
Report.
-------------------------------------------------------
2 All recognised gains and losses are included in the profit and loss account
for the period.
-------------------------------------------------------
3 The tax charge for the period ended 30 September 2004 has been based on the
estimated effective rate for the full year.
-------------------------------------------------------
Half year Half year Year
ended ended ended
30 30 31 March
September September
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
4 Analysis of turnover
Unmeasured supplies 10,533 10,607 21,072
Measured supplies 8,780 8,359 17,404
Other activities 2,030 1,988 4,560
-------------------------- ------------ ----------- -----------
21,343 20,954 43,039
-------------------------- ------------ ----------- -----------
5 Operating profit
-------------------------- ------------ ----------- -----------
Operating profit is stated after 50 24 50
charging
Refinancing costs
-------------------------- ------------ ----------- -----------
6 Reconciliation of operating profit to operating cash flow
Operating profit 7,046 7,072 14,202
Depreciation charge 4,607 4,321 8,745
Decrease/(increase) in stocks (108) 432 (41)
Increase in debtors (2,089) (3,510) 3,748
(Decrease)/increase in creditors (4,597) (215) (5,153)
-------------------------- ------------ ----------- -----------
4,859 8,100 21,501
-------------------------- ------------ ----------- -----------
7 Analysis of cash flows
Returns on investment and servicing
of finance
Interest received 2,840 857 2,342
Interest paid (2,942) (3,212) (6,884)
Interest element of finance lease - - (8)
rental payments
- -
-------------------------- ------------ ----------- -----------
(102) (2,355) (4,550)
-------------------------- ------------ ----------- -----------
Notes (continued)
Half year Half year Year ended
ended ended
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
7 Analysis of cash flows (continued)
Capital expenditure
Purchase of tangible fixed assets (12,838) (10,069) (22,180)
Contributions to infrastructure 1,941 2,042 234
assets
Sale of tangible fixed assets 64 1,655 1,687
-------------------------- ------------ ----------- -----------
(10,833) (6,372) (20,259)
-------------------------- ------------ ----------- -----------
Management of liquid resources
Decrease in cash deposits 1,260 2,402 4,868
-------------------------- ------------ ----------- -----------
Financing
New unsecured loan 20,000 - -
Loans from other group (9,570) 1,000 5,250
undertakings ------------ ----------- -----------
--------------------------
10,430 1,000 5,250
-------------------------- ------------ ----------- -----------
At Cash Non-cash At
changes
1 April Flow #000 30
September
2004
2004 #000 #000
#000
8 Analysis of net debt 1,130 2,991 - 4,121
Cash at bank and in hand 10,060 (1,260) - 8,800
Short term deposits
-------------------------- --------- --------- --------- ---------
Loans from other group 11,190 1,731 - 12,921
undertakings
Loan to parent undertaking (11,070) 9,570 - (1,500)
New unsecured loan 35,000 - - 35,000
Index linked loan - (20,000) - (20,000)
Issue costs (139,985) - (1,391) (141,376)
Debenture stock 2,341 - (41) 2,300
(4,461) - - (4,461)
-------------------------- --------- --------- --------- ---------
(106,985) (8,699) (1,432) (117,116)
-------------------------- --------- --------- --------- ---------
Notes (continued)
Half year Half year Year
ended ended ended
30 30 31 March
September September
2004 2003 2004
(unaudited) (unaudited) #000
#000 #000
9 Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the 2,991 (367) (442)
period
Cash inflow from increase in debt (10,430) (1,000) (5,250)
and lease financing (net of issue
costs paid)
Cash (inflow)/outflow from movement (1,260) (2,402) (4,868)
in liquid resources ------------ ----------- -----------
--------------------------
Movement in net debt resulting from (8,699) (3,769) (10,560)
cash flows ------------ ----------- -----------
--------------------------
Loan indexation (1,391) (1,544) (3,782)
Amortisation of issue costs (41) (42) (84)
Net debt at start of period (106,985) (92,559) (92,559)
-------------------------- ------------ ----------- -----------
Net debt at end of period (117,116) (97,914) (106,985)
-------------------------- ------------ ----------- -----------
This information is provided by RNS
The company news service from the London Stock Exchange
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