National Grid generates solid profit improvement

Energy network operator National Grid posted its final results for the year to 31 March on Thursday, with operating profit up 14% to £4.67bn on an adjusted basis, and profit before tax improving 13% to £3.56bn.

The FTSE 100 company said total adjusted earnings per share were 73p - a rise of 16% - while total adjusted earnings per share, excluding timing, were 66.1p, an increase of 6%.

Total group return on equity was 11.7%, down from 12.3% in the 2016 financial year, though the group made “significant” total capital investment of £4.5bn during the year, an increase of 5% at constant currency.

The board recommended a full-year dividend of 44.27p.

On a statutory basis, operating profit remained broadly in line at £4.1bn, and profit before tax decreased 3% to £2.93bn.

Statutory earnings per share were 207.1p, an increase of 201%, as it included a 141.4p gain on the disposal of UK Gas Distribution.

On the operating front, the board described performance during the year as “strong” as it made “significant” strategic progress, with UK regulated efficiency and “innovation” reportedly generating £460m in customer savings over four years.

It said the sale of 61% of the UK Gas Distribution business was complete, with £4bn being returned to shareholders.

“Last year was an important year for National Grid,” said chief executive John Pettigrew.

“We invested record capex of £4.5bn delivering a safe and reliable service for customers.

“Our focus on efficiency has also generated £460m of savings for customers in the first half of the 8 year RIIO framework.”

Pettigrew said the company made “significant” progress in the year, with the successful completion of the UK Gas Distribution transaction, a “good” outcome on the rate filings in the US and a “positive conclusion” to important regulatory reviews in the UK.

“National Grid is well positioned for the future with a rebalanced, higher-growth portfolio, and we are actively taking steps to evolve the business to meet the changing needs of our customers.”