The Finance & Economics Committee have announced that the majority shareholding in Jersey Water is not for sale. The announcement ends a year of uncertainty for the Company after the States announced in March 2004 a strategic review of its future, following an approach by The Jersey Electricity Company Limited, who had expressed an interest in making an offer for the Company.
David Norman, Chairman of Jersey Water, commented:
“We are naturally very pleased with the decision by the Finance & Economics Committee not to sell their shares in the Company and with the confidence that they have expressed in the management and staff. I would like to thank both Jersey Water’s staff and shareholders for their patience and loyalty over the past year.”
“The review identified a number of points for the Company and States to consider and we have already implemented or actioned many of those that have been agreed.”
“Now that the review is completed and the committee have made their decision, the Board can concentrate on the implementation of the plans outlined in the 2003 annual report, which included placing a greater emphasis on returns for shareholders.”
“The Company is very conscious of the need to carefully balance its duties to customers and shareholders alike and has implemented a plan that will not only support an increased return for shareholders, but will allow the company to continue improving and extending the water supply system and keep price increases either at or below inflation, a policy that has been followed consistently for a number of years.”
“Due to the significant investment that the Company has made extending and improving the water supply infrastructure for the benefit of our customers and the Island our shareholders have received little or no return on their substantial investment in the company for many years. With lower levels of capital expenditure being forecast for the foreseeable future, it is time to give the shareholders a more meaningful return on their investment.”
“Equity dividends for 2003 totalled £36,361 against distributable profits of just under £2 million. This level of dividend is unrealistic going forward and far below the dividend levels of the other utilities in the Island and water companies in the UK. Our equity shareholders currently have around £30 million invested in the Company which would cost around £1.7 million a year if replaced by borrowings.”
“The Board have adopted a new dividend policy, more in line with what shareholders might normally expect and based on the Company’s performance, to distribute broadly one third of normal operating cash flow adjusted for finance costs, tax and preference dividends. Accordingly, in the 2004 Financial Statements, the Directors will be proposing a final dividend for the year ended 31 December 2004 of 255.1 pence per share (gross) which will bring the total dividend on ordinary and A ordinary shares for the year to £1,000,000 (net). This will be subject to shareholder approval at the Company’s AGM in May.”
| • | Jersey Water is the trading name of The Jersey New Waterworks Company Limited. |
| • | Jersey Water is the oldest company registered in Jersey. |
| • | Of the 483,000 equity shares of Jersey Water in issue, 73.9% are owned by the States of Jersey. The balance of shares are owned by Companies and individuals (mainly Jersey residents). |
| • | Jersey Water is not listed on any stock exchange and therefore has no official share price. |
| • | Copies of the Company’s 2003 financial statements can be downloaded from the Financial Report section of the website. |
| • | Copies of the Company’s 2004 financial statements can be downlaoded from the Financial Report section of the website. |