National Grid to Invest GBP60 Billion in Energy Infrastructure After Profit Rises — Update

By Christian Moess Laursen

National Grid said it plans to invest around 60 billion pounds ($76.30 billion) in energy network infrastructure, and that its fiscal 2024 underlying profit rose.

The British electricity and gas utility said Thursday that its underlying pretax profit rose to GBP3.395 billion--excluding its U.K. gas transmission--in the fiscal year ended March 31 compared with GBP3.26 billion a year prior. Including the gas transmission unit, the underlying figure was GBP4.08 billion.

The result was mainly driven by its U.K. electricity transmission segment as well as operations in New York, and resulted in underlying earnings per share--a company-preferred metric--of 78 pence, also excluding the U.K. gas transmission unit. On a statutory basis, pretax profit fell 15% to GBP3.05 billion.

In a separate release, the company--one of Europe's largest energy-infrastructure companies--said it will invest around GBP60 billion over the next fiver years to deliver energy infrastructure in the U.K. and U.S.

To fund the plan, National Grid is raising around GBP7 billion in a fully underwritten rights issues of 645 pence per new share, representing a 34.7% discount to the Wednesday closing middle-market price of 1,127.5 pence.

The plan will also include selling its liquefied natural-gas terminal Grain LNG and National Grid Renewables in a bid to focus the portfolio on pureplay networks, it said.

Alongside this, the FTSE 100-listed group set its financial framework goals for fiscal 2025 to 2029, including group asset growth or around 10% on a compound annual rate, compared with the 8%-10% target for the five-year period to fiscal 2026. The underlying EPS growth target of 6%-8% on a similar basis was kept the same in the new framework.

For the current fiscal year, National Grid expects a strong operational performance, with underlying EPS to be broadly in line on year.

It declared a final dividend of 39.12 pence a share, taking the full-year payout to 58.52 pence. Analysts had expected 58.19 pence a share.

Operating profit, excluding the U.K. gas transmission unit, fell 8% to GBP4.475 billion, on revenue that slid 8.4% to GBP19.85 billion.

Its capital investment in energy infrastructure rose 8% at actual exchange rates to GBP8.2 billion, building on the prior-year's record spending.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

May 23, 2024 03:27 ET (07:27 GMT)

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