NATIONAL Grid saw six-month pre-tax profit surge 45 per cent to £938m, with operating profit growing in every part of the business.
The good performance is in part weather-related, with a warm summer in the US leading to high use of air conditioners on the east coast where National Grid’s interests are.
Six-month earnings per share (EPS) have increased five per cent to 20.3p with the £2.3bn rights issue completed in June. As a result of the earnings growth, National Grid increased its interim dividend by eight per cent to 12.9p a share. The firm, which owns and operates electricity and gas networks in both the UK?and US, said that profits were flattered somewhat by earnings from previous periods being carried over into the current results, with this effect accounting for about £200m of pre-tax profit.
Chief executive Steve Holliday told City A.M. that the firm is also on track with its £3.7bn investment programme, with most money being spent in the UK. It is planning for a seven per cent overall growth in its assets over the next five years, with electricity transmission expected to see 13 per cent growth.
Holliday said: “We are renewing assets that are old and connecting new generators – lots of them wind and nuclear. And we have to reinforce the system so that the power can flow from where they’re located to where you and I live.”
National Grid’s investment programme has been particularly affected by Britain’s increasing reliance on imported gas, meaning that energy has to be transported from different points of entry than used to be the case. As a result, it is expanding its facility on the Isle of Grain off the coast of Kent by a third, which will make it big enough to supply 20 per cent of the UK’s gas demand.