TIDM56WD
RNS Number : 1826M
Northern Electric Finance PLC
17 September 2021
NORTHERN ELECTRIC FINANCE plc
HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHSED 30 JUNE
2021
Cautionary Statement
This interim management report has been prepared solely to
provide additional information to shareholders to assess the
business of Northern Electric Finance plc (the "Company") and
should not be relied on by any other party or for any other
purpose.
Business Model
The Company is part of the Northern Powergrid Holdings Company
and its subsidiaries group of companies (the "Northern Powergrid
Group") and is a subsidiary of Northern Powergrid (Northeast) plc.
The Company's principal activity during the six months to 30 June
2021 was to act as the issuer of long-term bonds.
Results for the six months ended 30 June 2021
During the period ended 30 June 2021, the Company was in a break
even position (period ended 30 June 2020: loss of GBP0.1
million).
Income statement
Finance income and costs were GBP4.4 million and GBP4.5 million
respectively lower than the same period in the prior year due to
the repayment of long-term debt and related party receivable which
carried high interest rates.
Cash flow
Cash equivalents as at 30 June 2021 were GBP1.5 million lower
than the position at 31 December 2020 due to movements in
intercompany loans.
Financial position
Net assets as at 30 June 2021 were in line with the position at
31 December 2020.
Related party transactions
Details of the related party transactions entered into by the
Company and changes therein are included in Note 5 to this
half-yearly financial report.
Dividends
No ordinary dividends were paid in the period such that reserves
were unchanged.
Risks and uncertainties
The principal risks and uncertainties facing the Company are
included in the Company's latest annual reports and accounts for
the year to 31 December 2020, which is available at
www.northernpowergrid.com.
It is anticpated that these risks will continue to be the
principal risks facing the business for the remaining six months of
2021.
Going concern
In the Company's latest annual reports and accounts for the year
to 31 December 2020 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2021, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2020.
Future strategy and objectives
The Company will continue to act as the issuer of long-term debt
securities.
Responsibility Statement
The directors confirm that to the best of their knowledge:
(a) the condensed set of finanical statements, which has been
prepared in accordance with IAS 34, gives a true and fair view of
the assets, liabilities, financial position and profit of the
Company as required by Disclosure and Transparency Rules ("DTR")
4.2.4R for the six months to 30 June 2021; and
(b) the interim management report contains a fair review of the
information required by DTR 4.2.7R.
By order of the board
T H France
Director
16 September 2021
Six months Six months
ended 30 June ended 30
2021 June 2020
(unaudited) (unaudited)
GBPm GBPm
CONTINUING OPERATIONS
Finance income 6.2 10.6
Finance costs (6.2) (10.7)
--------------- ------------
LOSS BEFORE INCOME TAX - (0.1)
Income tax - -
--------------- ------------
LOSS FOR THE PERIOD - (0.1)
--------------- ------------
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE PERIODED 30 JUNE 2021
There is no other comprehensive income for the Company for the
six months to 30 June 2021 or the comparative six month period in
2020 other than the losses reported above.
30 June 31 December
2021 2020
(unaudited)
GBPm GBPm
ASSETS
NON-CURRENT ASSETS
Trade and other receivables 295.9 295.8
------------ ------------
CURRENT ASSETS
Trade and other receivables 3.0 4.1
Cash and cash equivalents - 1.5
------------ ------------
3.0 5.6
------------ ------------
TOTAL ASSETS 298.9 301.4
------------ ------------
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 0.1 0.1
Retained earnings (1.9) (1.9)
TOTAL EQUITY (1.8) (1.8)
------------ ------------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 295.9 295.8
295.9 295.8
------------ ------------
CURRENT LIABILITIES
Borrowings 4.8 7.4
4.8 7.4
------------ ------------
TOTAL LIABILITIES 300.7 303.2
TOTAL EQUITY AND LIABILITIES 298.9 301.4
------------ ------------
The half-yearly financial statements were approved by the board
of directors and authorised for issue on 16 September 2021 and were
signed on its behalf by:
T H France
Director
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2021 0.1 (1.9) (1.8)
Comprehensive income for
the period (unaudited) - - -
Balance at 30 June 2021
(unaudited) 0.1 (1.9) (1.8)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2020 0.1 (1.8) (1.7)
Comprehensive income for
the period (unaudited) - (0.1) (0.1)
Balance at 30 June 2020
(unaudited) 0.1 (1.9) (1.8)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January 2020 0.1 (1.8) (1.7)
Comprehensive income for
the period - (0.1) (0.1)
Balance at 31 December
2020 0.1 (1.9) (1.8)
-------- --------- -------
6 Months 6 Months
ended 30 ended 30
June 2021 June 2020
(unaudited) (unaudited)
GBPm GBPm
Profit before income tax - (0.1)
Finance costs 6.2 10.7
Finance income (6.2) (10.6)
------------ ------------
Cash generated from operations - -
Net interest paid (5.0) (5.0)
------------ ------------
Net cash used in operating activities (5.0) (5.0)
------------ ------------
Investing activities
Loan to related party - -
------------ ------------
Net cash used in investing activities - -
------------ ------------
Financing activities
Issue of long-term debt - -
Movement in loan from group undertakings 3.5 3.5
------------ ------------
Net cash generated from financing activities 3.5 3.5
------------ ------------
Net decrease in cash equivalents (1.5) (1.5)
Cash and cash equivalents at beginning of
period 1.5 1.5
------------ ------------
Cash and cash equivalents at end of period - -
------------ ------------
1. GENERAL INFORMATION
The information included within these condensed financial
statements that refer to the year ended 31 December 2020 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor
reported on those accounts and that report was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
2. ACCOUNTING POLICIES
Basis of preparation
The annual financial statements of the Company are prepared in
accordance with International Financial Reporting Standards as
adopted by the International Accounting Standards Board ("IASB").
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the IASB.
Going concern
In the Company's latest annual report and accounts for the year
to 31 December 2020 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2021, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2020.
Changes in accounting policy
The Company's accounting policies and methods of computation are
the same as the accounting policies which are described in the
Company's financial statements for the year ended 31 December
2020.
Application of new and revised IFRS
None of the standards, interpretations and amendments which are
effective for periods beginning 1 January 2021 has had a material
effect on the financial statements:
-- Amendments to IFRS 16 - COVID 19 related rent
concessions;
-- Amendments to IAS 1 - Presentation of financial statements;
and
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS16 -
Interest rate benchmark reform.
3. INCOME TAX EXPENSE
Tax for the six month period to 30 June 2021 is charged at
19.00% (six months ended 30 June 2020: 19.00%), which represents
the best estimate of the average annual effective tax rate expected
for the full year, as applied to the pre-tax income of the six
month period.
Finance Bill 2020 was enacted in July 2020 and as a result, the
rate of corporation tax has been held at 19% as the Finance Bill
2020 effectively removed the proposed reduction to 17% which was
included within Finance Bill 2016.
In addition, the March 2021 Budget announced that the
corporation tax rate will increase from 19% to 25% from 1 April
2023. This increase in tax rate was included within Finance Bill
2021 which was substantively enacted on 24 May 2021 and received
Royal Assent on 10 June 2021.
4. FINANCIAL INSTRUMENTS
Except as detailed in the following table, the directors
consider that the carrying value amounts of financial assets and
financial liabilities recorded at amortised cost are approximately
equal to their fair values:
Carrying Value Fair Value
30 June 31 December 30 June 31 December
2021 2020 2021 2020
(unaudited) (unaudited)
GBPm GBPm GBPm GBPm
Financial assets
Amounts owed by group
undertakings 298.9 299.9 384.1 424.0
Cash and cash equivalents - 1.5 - 1.5
------------ ------------ ------------ ------------
298.9 301.4 384.1 425.5
============ ============ ============ ============
Financial liabilities
Intercompany short-term
loan 3.5 - 3.5 -
2035 - 5.125% bonds 149.3 153.2 204.3 225.3
2049 - 2.750% bonds 147.9 150.0 171.9 194.1
------------ ------------ ------------ ------------
300.7 303.2 379.7 419.4
============ ============ ============ ============
5.
5. RELATED PARTY TRANSACTIONS
Transactions entered into with related parties and balances
outstanding were as follows:
Interest Borrowings
received owed (to)/from
from related related
parties parties
GBPm GBPm
Related party
Six months ended 30 June 2021 (unaudited):
Northern Powergrid (Northeast) plc 6.2 298.9
Yorkshire Electricity Group plc - (3.5)
-------------- ----------------
6.2 295.4
============== ================
Six months ended 30 June 2020 (unaudited):
Northern Powergrid (Northeast) plc 10.6 405.0
Yorkshire Electricity Group plc - (3.6)
-------------- ----------------
10.6 401.4
============== ================
Year ended 31 December 2020:
Northern Powergrid (Northeast) plc 19.5 299.9
Yorkshire Electricity Group plc - 1.5
-------------- ----------------
19.5 301.4
============== ================
Interest on loans to/from companies within the Northern
Powergrid Group is charged at a commercial rate of interest.
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END
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