Improved annual results posted by electricity distribution group
Electricity distribution group Electricity North West has reported much improved revenues and profits for the year to March 31, 2020, the fifth year of an eight-year regulatory period.
The Stockport-based business posted revenues of £478m for the year, up from £458m in the same period the previous year.
Pre-tax profits jumped from £87m in 2019 to £145.6m for the 2020 fiscal year.
However, the group has decided not to recommend a final dividend payment, due to the impact of the coronavirus pandemic.
The improved profits were based on the higher revenues figure, and lower interest costs.
Revenues rose in line with the allowed Distribution Use of System (DUoS) revenue under the RIIO price control.
The allowed revenue is recovered against an estimated level of electricity demand across the network.
Given the difficulty of predicting this demand each year, the organisation ends up with either an over, or an under recovery against planned revenue.
For the year March 31, 2020, there was an over recovery of DUoS revenue of £9.7m against plan before adjustment for RPI indexation (2019: £0.4m over recovery), reflecting variability against forecast in consumption volumes year-on-year.
This over recovery will be corrected through adjustments in revenue in two years’ time, in accordance with the methodology regulator Ofgem.
The latest figures reveal that the group currently employs more than 1,900 people in the region.
Chairman John Roberts said the year “was another successful year, with the company demonstrating further improvements, and achieving a number of best-ever performances, across the critical areas of safety, network reliability, customer satisfaction and the environmental impact of the business.”
Chief executive Peter Emery also noted that the company was the only network operator group in the country to have achieved green ratings from Ofgem in all categories for the last three consecutive years.
He added: “We finish the financial year with the country under lockdown due to coronavirus.
“Whilst many businesses are forced to close, we continue to provide the essential service that we deliver every day of the year, highlighting the absolutely critical role we play in keeping power flowing for the North West.
“As our revenues are collected, in-part, based on the demand over the network, the economic impact of coronavirus has resulted in a short-term reduction in cashflows.
“To the extent that we do not collect all our allowed revenues in the year, the regulatory framework adjusts collections in future years, and will not impact our ability to operate.”
The company owns, invests in, operate and maintains the network of poles, wires, transformers and cables which carry electricity from both the national grid and locally connected generation to homes and business across the North West, together with the increasingly important telecommunications network that controls the network remotely.