National Grid maintains guidance as half-year profits rise

(Sharecast News) - National Grid reported higher half-year profits and record investment spending on Thursday, as it continued to execute a £60bn five-year infrastructure plan spanning its UK and US energy networks. Statutory operating profit rose 17% to £1.53bn for the six months ended 30 September, while underlying operating profit climbed 12% to £2.29bn.

The FTSE 100 company said statutory profit before tax increased 21% to £826m, and underlying profit before tax was up 15% to £1.65bn.

Underlying earnings per share rose 6% to 29.8 pence, with an interim dividend of 16.35p, up 3%.

Capital investment reached a record £5.05bn, 10% higher than a year earlier.

"Our financial performance reflects another period of strong operational delivery in line with our five-year financial frame," said chief executive John Pettigrew.

"We continue to deliver for our customers, investing a record £5bn this half, and we are on track to invest over £11bn this year.

"This investment in our networks is critical to ensure continued resilience, enable economic growth, deliver cleaner energy, and meet growing power demand."

National Grid said it had secured supply chain and delivery mechanisms for more than three-quarters of its planned £60bn investment programme through 2029.

Agreements included an £8bn UK substation construction partnership, a £12bn framework for high-voltage direct current civil works, and partnerships to support more than $3bn of capital work in New England over the next five years.

The company said it had also completed £100m in cumulative cost synergies from its UK Electricity Distribution acquisition six months ahead of schedule, and continued to streamline its portfolio with the sale of National Grid Renewables and the agreed disposal of Grain LNG.

Progress also continued on several key UK transmission projects, including the first wave of Accelerated Strategic Transmission Investment (ASTI) schemes, while planning applications for the Norwich to Tilbury and Sea Link projects were accepted by the Planning Inspectorate.

In the US, the Smart Path Connect transmission upgrade was set to go live in December, and a further 208 miles of leak-prone gas pipeline were replaced.

On the regulatory front, the company said Ofgem's draft determination for the RIIO-T3 price control recognised investments expected to avoid £12bn in future constraint costs, equivalent to £40 per year in savings for consumers.

In the US, rate approvals were secured for New York and Massachusetts, with around three-quarters of the group's five-year US investment plan now approved.

Looking ahead, National Grid maintained its guidance for underlying earnings per share to grow between 6% and 8% annually from the 2024-2025 baseline of 73.3p, with group asset growth of around 10% a year through 2029.

Regulatory gearing was expected to rise towards the mid-60% range by March 2029.

Pettigrew, who will retire on 16 November after nearly a decade in the role, said it had been "a privilege to lead National Grid through a significant decade of growth," adding: "I'm confident that under Zoë Yujnovich's leadership, National Grid will continue to deliver for our customers and stakeholders."

Yujnovich, who joined as chief executive designate in September, was set to formally take over as CEO on 17 November.

At 0854 GMT, shares in National Grid were up 0.52% at 1,157.5p.

Reporting by Josh White for Sharecast.com.