Britain's largest listed utility, National Grid, was battered by a record £116m in storm costs in the US, but a solid performance in the UK helped underlying profits rise 5 per cent and support an 8 per cent rise in the dividend. Finance director Andrew Bonfield told Investors Chronicle that regulatory decisions in the UK and US in coming months will determine future investor returns and that the 4 per cent dividend increase planned for the current financial year is very much a holding policy which reflected this.
Adjusting for the effect of Hurricane Irene, a winter snowstorm and other bill timing differences, underlying group operating profits rose 9 per cent to £3.59bn, slightly ahead of analysts expectations. Operating profits in the US fell 12 per cent to £1.17bn after adjusting for timing and currency effects, but the unit will benefit from annual savings of $200m (£126m) in the current financial year after the completion of a cost reduction programme.
The performance of the UK gas and transmission business were solid enough with underlying operating profits up 6 and 5 per cent to £1.38bn and £741m, respectively. The outlook remains positive, too, as revenues in both businesses will benefit from regulatory linked increases. Completion of a gas storage plant helped adjusted operating profits in other activities to rise 57 per cent to £188m.
Analysts at Deutchse Bank forecast adjusted pre-tax profits of £2.8bn and EPs of 54.4p (2012: £2.6bn and 51.3p).
NATIONAL GRID (NG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 665p | MARKET VALUE: | £23.7bn | |
| TOUCH: | 665-665.5p | 12-MONTH HIGH: | 684p | LOW: 545p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 259p* | NET DEBT: | 212% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | 62.9 | 36.4 |
| 2012 | 13.8 | 2.56 | 57.1 | 39.3 |
| % change | -3 | -2 | -9 | +8 |
Ex-div: 30 May Payment: 15 Aug *Includes intangible assets of £5.3bn, or 150p per share | ||||
