Shareholder Executive

United Kingdom Atomic Energy Authority (UKAEA)

Purpose

The UK Atomic Energy Authority’s (UKAEA) main role is the safe decommissioning of the Dounreay nuclear site and Harwell and Winfrith sites, and applying its decommissioning and nuclear consulting expertise in competitive markets. It is also responsible for the UK’s contribution to fusion research within the European and world programme, including hosting the Joint European Torus (JET) facility at Culham. UKAEA also participates in a JV to develop the Harwell Science and Innovation Campus.

Legal Status and Ownership

The UKAEA is a non-departmental public body (NDPB) of BIS (formerly BERR). It was incorporated as a statutory corporation under the Atomic Energy Act 1954. UKAEA Ltd is a fully owned subsidiary of UKAEA.

Government's Objectives

• enabling an efficient, competitive market in UK nuclear clean up
• Site Licence Company structures licensed and fully established by 31 March 2008 with the necessary Site Management Company structure to manage these through to competition – now completed
• contribution to the UK and European Fusion research programmes
• development of the Harwell Science and Innovation Campus in support of Government’s science and innovation agenda
• the creation of UKAEA Ltd (the commercial arm of UKAEA) to allow the disposal of the Government Shareholding in those Commercial operations.

Financial Performance

£m	2009	2008	2007
Turnover	328	375	378
Operating Profit	2	7	14
Profit/(Loss) for the year	3	11	15
Net Cash flow	(6)	9	(67)
Net Operating Assets	31	78	126
RONA	7.5%	9.3%	11.4%
Shareholders' Funds	88	83	89
Dividends	-	-	-

Dividend policy

UKAEA uses any surplus to fund nuclear decommissioning, waste management, environmental remediation services, and fusion research.

Performance targets

Performance measures are based upon a number of criteria relating to corporate profitability, cash generation, operational safety, and delivery of the business plan.

Commentary

Turnover for the year amounted to £328.1m (NDPB Group).The fee received from the NDA in relation to performance has been used to finance the ongoing restructuring of UKAEA and to fund certain costs outside the contract.This resulted in operating profit before financing and taxation of £1.7m (2007-08: £7.3m) (both NDPB Group).The decrease in operating profit before financing and taxation was mainly due to a reduction in the fee earned from the NDA.The retained profit for the year, after financing and tax, was £3.3m (NDPB Group).

UKAEA delivered 97% of the clean up programmes at 4% below budget excluding Windscale. Windscale delivered 99% of the agreed programme at 14% below budget.

Significant decommissioning work was undertaken at Dounreay in respect of destroying the radioactive sodium which was used as a coolant in the Prototype Fast Reactor (PFR) and the removal of sodium residues from the reactor vessel. Destruction of a number of the high hazards on the site has also commenced.

The first fuel pond at Dounreay has been completely cleaned out, involving the emptying of the pond, draining of water and removal of the stainless steel liner. Alongside this, UKAEA achieved continued excellent safety performance.

UKAEA Ltd (the commercial arm of UKAEA which excludes fusion research and site license companies), has performed with increasing confidence in its first year of trading, establishing a robust platform for business growth. As well as achieving an overall profit of £3.8m (UKAEA Ltd), it has built up a significant pipeline of future work, which has supported a more ambitious Business Plan than had previously been envisaged.

The work being undertaken in fusion research at Culham continues to be fundamental to the success of the international fusion reactor programme. A new Director of Fusion Research, Steve Cowley was appointed by the business.

The year saw the commencement of a sale process of the share capital of UKAEA Ltd.The sale process was announced in March 2009 and is intended to be completed prior to the 31 December 2009.

On 13 August 2008, UKAEA formed a new public- private partnership with Science and Technology Facilities Council (STFC) and a property group, Goodmans International, to develop the Harwell Science and Innovation Campus (HSIC).This joint venture now has responsibility for management and development of HSIC.