Belfast Telegraph

Phoenix Natural Gas no longer the main supplier of natural gas in NI

Company Report

Phoenix Natural Gas is the main company distributing natural gas in Northern Ireland, although no longer as a main supplier.

It's a wholly-owned subsidiary of Phoenix Distribution Holdings in England. Since August 2013, PDH has been wholly owned by investment holding company, Lionrai Investments No.1.

Lionrai is jointly owned by the Utilities Trust of Australia and the Group Pension Fund of the Royal Bank of Scotland.

The trading results for Phoenix Natural Gas may appear disappointing. Allowable operating revenue is determined by the Utility Regulator and actual revenue is adjustable, retrospectively, for any over or under recoveries.

Operating profits were recorded, at 29% of turnover. However, pre-tax losses have been declared. The losses are partly a result of the major recapitalisation of the business by large amounts of bank and bond borrowing, through the parent companies. Net interest costs on borrowed funds cost nearly £21m in 2016.

Below the pre-tax losses, as stated in the profit and loss account, the business adds a gain through the revaluation of fixed assets which added £14m in 2016 and £30m in 2015, following comparable amount of £27m in 2014.

For the shareholding parent company, Lionrai, the revaluation of the fixed assets has underpinned decisions to make dividend payments by Phoenix. In three recent years, dividends allocated were, respectively, £90m, £25m, and £20m up to 2015. No dividend was allocated in 2016.

At the end of December 2016, Phoenix had interest-bearing loans of £287m including bonds. Bonds covering £275m were due to mature this month. In addition, the company had £170m of term and revolving bank facilities.

Belfast Telegraph