A dramatic decline in statutory pre-tax profits for National Grid (NG.) reflects a year in which the group faced challenges on a number of fronts whilst attempting to streamline its operations and invest in future growth.
US operations were adversely impacted by £93m in major storm costs and a £283m settlement of a labour dispute at the Massachusetts gas business. A slightly lower return on equity (RoE) of 8.8 per cent represents 93 per cent of allowed returns, but with all companies now operating under refreshed rates, this is expected to increase to at least 95 per cent in 2020.
In the UK, the group suffered a £137m impairment on nuclear connection projects in Cumbria and Wales that had been in development for over 10 years. As part of their broader efficiency programme, £136m in restructuring costs have been aimed at strengthening the group’s position ahead of RIIO-T2 (Ofgem's price controls). Although the consultation is ongoing, it is highly likely that allowed returns will be significantly reduced from 2021.
Increased capital investment of £4.5bn fuelled asset growth of 7.2 per cent (compared to 5.9 per cent in 2018), above the targeted 5-7 per cent range. The group expects capital investment to increase to £5bn in 2020, maintaining asset growth at the 7 per cent level.
| NATIONAL GRID (NG.) | ||||
| ORD PRICE: | 818.9p | MARKET VALUE: | £ 27.94bn | |
| TOUCH: | 818.8-819.1p | 12-MONTH HIGH: | 895.1p | LOW: 744.5p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 567p | NET DEBT: | 137% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 15.2 | 2.63 | 53.2 | 42.87 |
| 2016 | 13.2 | 2.33 | 50.4 | 43.34 |
| 2017 | 15.0 | 2.18 | 48.1 | 44.27 |
| 2018 | 15.3 | 2.66 | 103 | 45.93 |
| 2019 | 14.9 | 1.84 | 44.3 | 47.34 |
| % change | -2 | -31 | -57 | +3 |
| Ex-div: | 30 May | |||
| Payment: | 14 Aug | |||
| *Includes intangible assets of £6.95bn or 204p a share | ||||
