Annual Report & Financial Statements 2014/15
Manx Utilities reports a surplus for the year of £2.1m compared with a combined deficit for WSA and MEA in 2013/14 of £4.8m, and although part of this turnaround (£3m) is due to a foreign currency gain on a long term finance lease liability, these results show that the merged entity is progressing towards a sound financial footing.
The Annual Report & Financial Statements for Manx Utilities for 2014/15 will be laid before Tynwald on 20 October 2015.
The Financial Statements show that following the merger of the Manx Electricity Authority (“MEA”)and the Isle of Man Water and Sewerage Authority (“WSA”), Manx Utilities is slightly ahead of the financial plan approved by Tynwald in January 2014.
Chairman, Alf Cannan MHK said, “It is to the credit of the Manx Utilities staff that we are ahead of the long term financial plan approved by Tynwald, however as a note of caution, significant contributions to this positive result were due to global energy and foreign exchange markets, which may not be repeated in future years. From 2015/16 we will also be required to pay interest charges to Government which will have a negative financial impact. The Manx Utilities Board remains acutely aware that the cost of living challenges facing our customers remain and we must do all we can to deliver our services as cost effectively as possible. We will therefore continue to seek further progress with the realisation of synergies and delivery of efficiency savings.”
The bond repayment fund – which is in place to repay the Manx Utilities bonds totalling £260m - has increased to £33m from £30m in the previous year, and the net debt has reduced by £11m – from £508m to £497m.
Manx Utilities reports a surplus for the year of £2.1m compared with a combined deficit for WSA and MEA in 2013/14 of £4.8m, and although part of this turnaround (£3m) is due to a foreign currency gain on a long term finance lease liability, these results show that the merged entity is progressing towards a sound financial footing.
The increase in income of £1.5m is mainly attributable to inflationary increases in both water rates and electricity unit charges, together with the introduction of the sewerage charge, set against reductions in electricity volume sales of 1.3%.
During the year, the Manx Utilities Board successfully replaced the unpopular sewerage charge with a more equitable sewerage rate . This was introduced on 1 April 2015.
Operating cost reductions contributed £2.2m, largely due to the synergies realised by combining the two organisations. One-off merger costs of approximately £0.3m were incurred; these were, however kept to a minimum by a phased rebranding programme and by all Manx Utilities staff working together to find ways to best combine the operations in a cost effective way.
The capital expenditure was within budget and totalled £12.5m including further expenditure on the Regional Sewerage Treatment Scheme and the overhaul of one of the Combined Cycle Gas Turbines at Pulrose Power Station.
Operational Highlights
At an operational level, all our business streams continued to perform at an exceptional level:
- Electricity - Best electrical supply reliability ever
- Water - Water Quality exceeding standards prescribed in the UK and Europe
- Natural Gas Supply - 100% reliability through offshore pipeline
- Telecoms - 100% service level compliance for Island businesses via subsea fibre optic
- Sewerage - Regional Sewerage Treatment Strategy continues with work completed at Maughold, Booilushag and Port Lewaigue. Construction of a new drier at Meary Veg to improve efficiency and reliability of our Island Infrastructure which is more economical to run and will support clean beaches for the Island into the future.