National Grid’s full-year profits beat analysts' expectations, mainly reflecting strong operating performances from the US gas and electricity businesses. In total, the US operations grew operating profit in the year 31 per cent to £1.69bn.
Admittedly, some of the improvement to US receipts reflected timing issues - essentially, the collection of revenues owed from previous years - as well as warm weather in the US. But National Grid should also benefit from a planned $200m (£123m) of synergy cost savings from its US KeySpan merger. Meanwhile, progress in the UK was slower and total operating profit there rose just 2 per cent in the year to £2.1bn.
National Grid is, however, investing heavily to develop the infrastructure needed to support low-carbon and renewable energy sources. Capital expenditure reached £3.6bn in the year, helped by last year's £3.2bn rights issue, and £2.1bn has been invested in the UK transmissions business. Management says that another £19bn of investment is expected over the next four years.
EU-driven regulatory negotiations will largely determine the group's future UK pricing regime, while in the US, regulators have rejected the group's requests for higher transmission rates. Prior to these figures, Liberum Capital expected EPS of 51.7p for 2012.
.
| NATIONAL GRID (NG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 622p | MARKET VALUE: | £21.8bn | |
| TOUCH: | 621-622p | 12-MONTH HIGH: | 639p | LOW: 475p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 258p* | NET DEBT: | 207% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p)† | Dividend per share (p)† |
|---|---|---|---|---|
| 2007 | 8.70 | 1.75 | 42.1 | 25.1 |
| 2008 | 11.4 | 2.18 | 57.8 | 38.9 |
| 2009 | 15.6 | 1.39 | 32.3 | 31.2 |
| 2010 | 14.0 | 2.19 | 48.4 | 33.7 |
| 2011 | 14.3 | 2.62 | 63.9 | 36.4 |
| % change | +2 | +20 | +32 | +8 |
Ex-div: 1 Jun Payment: 17 Aug *Includes intangible assets of £5.3bn, or 150p a share †Adjusted for 2010's rights issue | ||||
